All iPads Apple has become predictable

[iHeartsteve]

Not likely, since it'd sell at about $499 and would be hot, heavy, and thick compared to what they actually shipped.

How do technological constraints today contradict future advances?

The iPad mini's gross margin is around 30% already. You have some seriously off-base ideas about markup and costs.

So let's look at some numbers.

iPad mini estimated costs:
Display assembly: $57
Battery: $13
RAM: $8
A5: $14

Cost of iPhone 5 display (for baseline comparison at same pixel density): $44
iPhone 5 screen area: 6.7 inches ($6.56 per sq in). iPad 3/4 display cost: $127 for about 45 square inches at 264ppi ($2.82 per sq in). Hypothetical retina iPad mini would most likely have a display more expensive than its big brother, since higher density drives higher costs on multiple levels, but let's be generous to you and say $5 per sq in since some of display costs won't scale linearly. At 29.6 sq in, that's $148, a $91 increase in components cost by itself (on a device with a total components cost of around $220).

Then you need the A6X, costing roughly double the estimated $14 of the A5, along with moving from 512MB to 1GB of RAM, or $8 to $12. Then of course there's the battery--the iPad needs 65%+ more capacity just to match battery life with the retina display, so that $12.50 jumps up another $7, easily. That's $25 in cost increases just to make the retina display work.

$116 more in parts. With 30% margin, you're now selling the iPad mini at...$499, give or take. The only cost savings you're looking at compared to the iPad 4 is a somewhat smaller, less expensive battery, maybe a buck or two in aluminum, and a lower margin overall compensates for the more expensive screen.

Even in a fantasy land where you could make a 326ppi screen at the right size for $100, you're only pushing the price of the mini down to $429 at best.

I really don't feel like arguing every single device down to the penny. I did mention over and over again that apple is probably making between 300-500% profit margin. IF these costs you display are even correct they are still making 300% and that's on the BASE MODEL w out LTE.

And IMO, I do think people would pay $100 more for retina b/c apple already priced themselves out of the 'cheap' tablet margin by setting base version at $329. You have your opinion and I have mine.

Apple also makes millions on itunes. Apple just chose not to throw in the retina for they could increase their profit, simple as that. I don't think they did anything illegal. Just another company out for the buck when they could have given us value.

Basically if apple only made $50 on each device sold, they'd still be making millions. Apple sold 5 MILLION iphones alone.

 

[fupresti]

Basically if apple only made $50 on each device sold, they'd still be making millions. Apple sold 5 MILLION iphones alone.

I think Apple and its shareholders would rather they make billions, rather than millions.

 

[lianlua]

I really don't feel like arguing every single device down to the penny. I did mention over and over again that apple is probably making between 300-500% profit margin.

Repeating that over and over doesn't make it true.

IF these costs you display are even correct they are still making 300% and that's on the BASE MODEL w out LTE.

Since when is $109 300% of $220?

And IMO, I do think people would pay $100 more for retina b/c apple already priced themselves out of the 'cheap' tablet margin by setting base version at $329.

I think people would, too. Except that it isn't doable. The necessary product doesn't exist at all, and certainly not for $100. I don't think people would pay $170 more for a thicker, heavier mini with worse battery life just to get a retina display...at least not in numbers to justify the product.

If Apple could have launched a premium version of the iPad mini with a retina display, they would have, just like they do with the MacBooks. It's not something that's doable right now.

Apple just chose not to throw in the retina for they could increase their profit, simple as that.

They're already decreasing their profit by making the current mini. Investors aren't all that thrilled about that.

Basically if apple only made $50 on each device sold, they'd still be making millions. Apple sold 5 MILLION iphones alone.

They only make about that much right now on the $329 model.

 

[iHeartsteve]

Repeating that over and over doesn't make it true.

Since when is $109 300% of $220?

I think people would, too. Except that it isn't doable. The necessary product doesn't exist at all, and certainly not for $100. I don't think people would pay $170 more for a thicker, heavier mini with worse battery life just to get a retina display...at least not in numbers to justify the product.

If Apple could have launched a premium version of the iPad mini with a retina display, they would have, just like they do with the MacBooks. It's not something that's doable right now.

They're already decreasing their profit by making the current mini. Investors aren't all that thrilled about that.

They only make about that much right now on the $329 model.

Your math is off. According to your cost of the ipad you provided, it cost $92. the base model is $329. That is 300% profit. if it was 200% then the retail price would be $184.

Do we really have to get this nitty gritty?? hahah waste of time. No matter what costs you provide, apple will always make money.

 

[mebehere]

All I know is that Apple better keep its eyes open regarding emerging tech. Jobs didn't invent a thing, but he knew a brilliant - if currently flawed implementation - piece of tech, and he got the right people to make it dreamy.

 

[iHeartsteve]

I think Apple and its shareholders would rather they make billions, rather than millions.

agreed and that is why there is no retina display on our mini.

 

[Idefix]

People are so jaded nowadays. You've heard the phrase, "meals to tempt the most jaded appetites?"

Well, everybody expects "an iPad mini to tempt the most jaded appetites." You can say the same thing about the iPhone, "an iPhone to tempt the most jaded appetites."

Both of these have been said in this thread. As in, "I'm so tired of the iPhone, all they did is make it longer..." etc.

A jaded person will never be satisfied, they want miracles at every product introduction.

Unfortunately, jaded people are those who go online to complain, and then they set themselves up as "discerning critics!"

Nope, they're just plain jaded.

 

[lianlua]

Your math is off. According to your cost of the ipad you provided, it cost $92. the base model is $329. That is 300% profit.

Wow. The $92 is for the four components related to the retina display, not the total cost of the entire device. There's a whole pile of components I didn't list individually. The total component cost of the entire product is $220, as is also stated in the post.

Do we really have to get this nitty gritty??

Apparently. You have no sense of what things cost (or, based on the idea that four pieces floating in isolation comprise the entire device, have no idea what's actually inside a tablet) but are declaring it a trivial expense to put in a display that would increase BOM cost by around 50%. Speaking in specifics should be educational for you.

 

[iHeartsteve]

Wow. The $92 is for the four components related to the retina display, not the total cost of the entire device. There's a whole pile of components I didn't list individually. The total component cost of the entire product is $220, as is also stated in the post.

Apparently. You have no sense of what things cost (or, based on the idea that four pieces floating in isolation comprise the entire device, have no idea what's actually inside a tablet) but are declaring it a trivial expense to put in a display that would increase BOM cost by around 50%. Speaking in specifics should be educational for you.

I said several times, apple was making between 300-500% with out retina display. So the costs you provided me fit my explaination. I also mentioned over and over again that even w the retina, that they would still make money but would have to take a slight cut. Unfortunately, you proved you do not have full understanding of profit margins. But the difference is, I nicely said your math was off instead of belittling you. I see you are now trying to tell me I have no sense. Hahah

Again, no matter what costs you give me, apple will still make more than enough profit. Therefor I agree to disagree w you.

 

[lianlua]

I said several times, apple was making between 300-500% with out retina display. So the costs you provided me fit my explaination.

Nothing about either of those sentences is true. The margin on the iPad mini is in the 30% ballpark, and the costs you were provided do not fit your "explanation" in the slightest.

I also mentioned over and over again that even w the retina, that they would still make money but would have to take a slight cut.

Hence the explanation that you either don't know what things cost or you don't know what "slight" means. $116 on $220 is not slight. Not remotely. It puts the $329 mini not at a reduced net profit, but at a stark loss. They'd have essentially no gross margin--something even Google won't do to sell tablets.

Unfortunately, you proved you do not have full understanding of profit margins.

You've got that backwards. Apple's a publicly traded company. They report these numbers: a gross margin of about 41% and a net profit of about 22%. The iPad mini's margin is "significantly below" corporate average. The fiction that they're pulling in ten times their average is beyond incredible.

 

[iHeartsteve]

Nothing about either of those sentences is true. The margin on the iPad mini is in the 30% ballpark, and the costs you were provided do not fit your "explanation" in the slightest.

Hence the explanation that you either don't know what things cost or you don't know what "slight" means. $116 on $220 is not slight. Not remotely.

You've got that backwards. Apple's a publicly traded company. They report these numbers: a gross margin of about 41% and a net profit of about 22%. The iPad mini's margin is "significantly below" corporate average. The fiction that they're pulling in ten times their average is beyond incredible.

Hahaha there is no way it's only $4 difference. That would mean apple is not making any money on their other retina devices. I'm not going to keep arguing w someone that is just throwing out numbers now to prove their point.

Have a good night.

 

[lianlua]

Hahaha there is no way it's only $4 difference.

Where are you getting $4?

That would mean apple is not making any money on their other retina devices.

What? No, it doesn't mean that at all.

I'm not going to keep arguing w someone that is just throwing out numbers now to prove their point.

Good decision. The numbers don't lie.

Have a good night.

Likewise.

 

[iHeartsteve]

Where are you getting $4?

What? No, it doesn't mean that at all.

Good decision. The numbers don't lie.

Likewise.

Typo. Accidentally pressed submit before I finished typing in $104. You don't even know if these numbers you are supplying are even accurate! Hahah. Just bc you conjured up these numbers from various online sites means there's validity. Most of these costs are probably not based on the large quantities that apple buy in. Huge manufacturers that buy in the millions often get things at 1/4 of the average price. So whatever numbers you throw out are when the components are bought individually.

Apple is making plenty of money. No need to worry about it.

 

[lianlua]

You don't even know if these numbers you are supplying are even accurate!

To the penny? No. But the numbers are sourced from industry analysts and the costs they are showing are close to the costs we pay for similar components. iSuppli's methodology isn't perfect and KGI doesn't know exact arrangements between Apple and their vendors, but they are not off by the orders of magnitude required to make your argument even remotely realistic. The point is that we are not talking about a negligible expense of a few dollars. We are talking about a major expense and major design compromises.

Most of these costs are probably not based on the large quantities that apple buy in.

They are.

So whatever numbers you throw out are when the components are bought individually.

No. If you wanted to buy one of each iPad part, you'd be paying a lot more than that.

Apple is making plenty of money. No need to worry about it.

Nobody's worried about that. We're only talking about your completely baseless arguments about 300-500% profit and a retina panel only adding a few dollars to the cost.

 

[iHeartsteve]

Since you like numbers. Here's this article:

http://news.cnet.com/8301-13579_3-57512904-37/iphone-5-may-cost-apple-$167.50-to-build-says-one-estimate/

iPhone 5 which is far smaller and light than the iPad mini and can obviously do everything that an iPad does costs only $167.50. The iPhone 4 cost only $112. This probably based on what components cost individually.

Apple is approximately making 400% profit off of each BASE model iPhone 5. The 32g and 64g prob only costs $20 more.

Apple would NEVER want it released as to what 'discounts' they're getting from china. People would be outraged if they really knew how much apple was making on each device. Everyone knows it costs a small fraction to manufacture products over there.

 

[caoap1]

I already know what the next ipad mini is going be and when its going to be released.

Its going to be have a retina display and a6 cpu. Same price, release date somewhere in september. I will be buying one then cause the current ipad mini is so flawed.

I bet you that next ipad mini will not have retina display, but 3rd one will

 

[ixodes]

I'm just saying they could have given us some bells and whistles while still making money. T

Your point is accurate.

Yet it's important to not underestimate Apple's greed. Second to their greed is their ability to sell anything. They know exactly how far they can go & still draw people in.

This dates way back. It's the reason Apple could charge a whopping $600 for the original iPhone without 3G. Every other phone had 3G standard but Apple.

Apple used their hype, a little double talk about how bad 3G was & the buyers took the bait.

Apple can pull off anything.

 

[iHeartsteve]

Your point is accurate.

Yet it's important to not underestimate Apple's greed. Second to their greed is their ability to sell anything. They know exactly how far they can go & still draw people in.

This dates way back. It's the reason Apple could charge a whopping $600 for the original iPhone without 3G. Every other phone had 3G standard but Apple.

Apple used their hype, a little double talk about how bad 3G was & the buyers took the bait.

Apple can pull off anything.

Agreed. I never accused apple of completely ripping us off, nor do I think the mini is 'bad' or defective. Hell, I might even buy one bc I would like smaller portable device so I can carry it everywhere w me. Apple is a business and they want to make money, simple as that.

 

[lianlua]

iPhone 5 which is far smaller and light than the iPad mini and can obviously do everything that an iPad does costs only $167.50.

It's more like $200 if you use an actual estimate done after the phone was released rather than a blind shot in the dark, but the point you should be walking away from that with is just how big of a proportion the SOC and display assembly are of the total device cost, and if you look at the BOM for the iPads, just how much more those giant screens and batteries cost.

Apple is approximately making 400% profit off of each BASE model iPhone 5.

No, they're not. They don't get $649 every time an iPhone is sold. $649 is just the price charged on the small number of people who pay full retail price for their phones. The carriers pay a much smaller amount over the $199 price.

People would be outraged if they really knew how much apple was making on each device.

People do know, and it's not anywhere near 400% across the board. They publish all of their information for investors. You can look up their unit sales, revenues, and profits.

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This dates way back. It's the reason Apple could charge a whopping $600 for the original iPhone without 3G.

It was $500, and totally unsubsidized. It was not unusual for unsubsidized Treos, Blackberries, and Windows Mobile devices to go for $800+ back then.

Every other phone had 3G standard but Apple.

No, that isn't even remotely true. Most phones sold that year did not have 3G. Lots of them did, but you exaggerate.

Apple used their hype, a little double talk about how bad 3G was & the buyers took the bait.

So Google is doing the exact same thing with the Nexus 4? Because it doesn't have LTE for exactly the same reasons.

3G availability sucked on AT&T then. I didn't (and don't) have an iPhone, but the battery life of my 3G Windows Mobile phone was awful unless I kept it turned off--and that's in the relatively few places it worked in the first place. The next generation of 3G phones improved tremendously, and that's all because they all jumped on the same Qualcomm radio that the 3G iPhone used when it became available.

Businesses exist to make money. It's not a secret.

 

[Allegrotechie]

I think Apple and its shareholders would rather they make billions, rather than millions.

True

 

[iHeartsteve]

It's more like $200 if you use an actual estimate done after the phone was released rather than a blind shot in the dark, but the point you should be walking away from that with is just how big of a proportion the SOC and display assembly are of the total device cost, and if you look at the BOM for the iPads, just how much more those giant screens and batteries cost.

No, they're not. They don't get $649 every time an iPhone is sold. $649 is just the price charged on the small number of people who pay full retail price for their phones. The carriers pay a much smaller amount over the $199 price.

People do know, and it's not anywhere near 400% across the board. They publish all of their information for investors. You can look up their unit sales, revenues, and profits.
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Clearly my 300-500% profit was not 'baseless' as you previously stated. This argument could go on forever.

IMO apple will always make money and could have still made a profit (pointless to argue down to the penny about the exact amount) if they added retina. You will always think Apple was correct in not adding it bc it would be too costly.

This time, I'm done arguing. Lol

----------

True

Agreed. It's always about more money for apple.

 

[lianlua]

Clearly my 300-500% profit was not 'baseless' as you previously stated.

Yes, it is. You seriously misunderstand how this all works.

Apple doesn't clear anywhere near 300% profit on iPhones. Half of their corporate revenue comes from iPhones, and their corporate net profit is 22%. If you were right, they'd not only be failing to make any money on the rest of their product lineup, but they would be paying people to take their other stuff because their losses would exceed their costs. The only way that can happen is if they are setting money on fire to heat their buildings or giving it away left and right.

 

[iHeartsteve]

The only way that can happen is if they are setting money on fire to heat their buildings or giving it away left and right.

This is why I'm done arguing...

 

[lianlua]

This is why I'm done arguing...

I should hope so! Apple would be very sad to learn of the 250% loss you foisted on their iPad, Mac, iPod, software, and iTunes/App Store sales divisions.

 

[jmpnop]

I said he'd be 'working on' something revolutionary. No I do not expect some magical device every upgrade. My point again is that w NO STEVE JOBS, the man with the revolutionary, genius mind...is gone. Plus the 2 apple heads are gone and the one guy was Steve jobs right hand man.

Apple is already doing uncharacteristic business decisions.

So you're saying Steve was responsible for all the innovation? You do realize there's a huge team working on products and one man just cannot run a company. Steve no doubt was a great man but saying he was responsible for everything at Apple isn't right. And btw Steve had planned products for years ahead, Steve was involved in the products you see today.