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Apple Watch Sport Component Costs Estimated at $83.70, Which Won't Sit Well With Tim Cook
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No
Marketing & sales only gets you so far.
No matter what the company or product -- keep this in mind:
Marketing: Gets you TO the door.
Sales: Gets you THROUGH the door.
Good or great product/service: Keeps you IN the building.
If your product or service is garbage, you'll leave and never come back again.
Yeah it's incredible that they're able to rip off their customers and that their customers try to find reasons as to why this is a good thing.
Boggles my mind.
I understand what you're saying but it's not really an apt comparison. You can't have a machine build a house, and building a house typically requires weeks or months of skilled labor from experienced construction workers.
Yeah, a lot of research went into figuring out how best to assemble the Apple Watch. But once that work was done, they utilize machines and cheap labor to pop one out every 20 seconds. Surely that cost needs to be incorporated somewhere but I doubt that, allocated, it's enough to even bring the final cost over ~$120.
What is the relevance to all of this IHS?
If people are happy with Watch and willing to pay the price Apple decides to sell it at what are you worrying about?
The components do not make the full product... Design, R&D, Manufacturing costs, Marketing... where shall I stop?
IHS iSuppli - What is the point to your exercise?
If people are happy with Watch and willing to pay the price Apple decides to sell it at what are you worrying about?
The components do not make the full product... Design, R&D, Manufacturing costs, Marketing... where shall I stop?
IHS iSuppli - What is the point to your exercise?
The only person that needs to be thinking of your wallet is yourself. You choose what you want to buy, and I'll choose what I want to buy. If you don't think the Apple Watch is worth your money, don't buy it. Nobody is forcing you to buy the Apple Watch, as you seem to imply.
Also, learn how products are developed, manufactured, shipped, and sold before you make comments on profit margin.
Big margins makes total sense. This is a product for Apple loyalists, who represent relatively inelastic demand curves, and there isn't a lot of competition.
And for the people saying they need to recoup R&D costs...that has absolutely nothing to do with pricing. Profit maximization occurs when marginal cost equals marginal revenue. This has nothing to do with fixed costs.
And for the people saying they need to recoup R&D costs...that has absolutely nothing to do with pricing. Profit maximization occurs when marginal cost equals marginal revenue. This has nothing to do with fixed costs.
I don't really understand why people get so excited about cost breakdowns of apple products. There are some fundamentals everyone should understand. Apple is a business, businesses are there to make money. Apple will never sell a product at a loss, as that would not make sense. Everyone knows you pay a premium on apple products, and if you're willing to pay the price, enjoy the product and stop complaining.
If you want to be truly shocked by product profit margins, try items such as iPhone cases, many of which have profit margins of well over 300%.
If you want to be truly shocked by product profit margins, try items such as iPhone cases, many of which have profit margins of well over 300%.
What is the relevance to all of this IHS?
If people are happy with Watch and willing to pay the price Apple decides to sell it at what are you worrying about?
The components do not make the full product... Design, R&D, Manufacturing costs, Marketing... where shall I stop?
IHS iSuppli - What is the point to your exercise?
ps: Of course the internals are the same - stupid quote
R&D, advertising, etc. knowing the cost of the raw materials of a Mercedes Benz can't get you a brand new S Class in your garage for the same cost.. stupid way to look at this.
Yeah, I'm gonna wait until we see a smart watch with a quad core processor and 2GB of RAM before I consider buying.
gross margin
Why all these polemics about real cost and R&D while the gross margin of Apple products is made available to the public officially by Apple ?
April 27, 2015: "Gross margin was 40.8 percent compared to 39.3 percent in the year-ago quarter."
Why all these polemics about real cost and R&D while the gross margin of Apple products is made available to the public officially by Apple ?
April 27, 2015: "Gross margin was 40.8 percent compared to 39.3 percent in the year-ago quarter."
You're right but to what extent? Those costs diminish quite a bit after the first version is produced, and we know the price probably isn't going to diminish a few iterations down the road. This is just classic Apple getting away with much larger profit margins than the rest of the industry. They don't get hundreds of billions of dollars in cash without them.
If we ignored all the other costs that were not included in the report (i.e. R&D, marketing), how accurate is this component cost breakdown? Are those components valued at bulk-pricing that Apple would actually pay per part?
Looks like someone just finished their intro to micro class.
In the real world, fixed costs are accounted for in pricing. How else are you going to cover them?