Cost of production vs. retail price

Discussion in 'Apple, Inc and Tech Industry' started by chrislaw, Jul 5, 2009.

  1. chrislaw macrumors 6502a

    chrislaw

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    central ohio
  2. thegoldenmackid macrumors 604

    thegoldenmackid

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    dallas, texas
    #2
    These get reported much more for the iPhone and iPod then anythingelse, but they occasionally get reported for other Macs. It has gotten somewhat harder for some of the other computers like the Mac Pro because Apple gets the processors first.
     
  3. Eidorian macrumors Penryn

    Eidorian

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    Mar 23, 2005
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    Indianapolis
    #3
    The prices are subsidized for the phones. Launch day prices does matter the most here and Apple rarely does any silent price drops during the model life as component costs go down. Updates are usually the only time and the MacBook Pro is one of the few exceptions.

    The original Core Duo processors were quite expensive for the time as well given that they were the first mobile x86 dual core out there.

    The loss leader HD disc players and consoles are supposed to be backed by software sales making up the shortfall on hardware. Sometimes that can be a bit too much of an investment that might never be won back.
     
  4. JNB macrumors 604

    JNB

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    #4
    What's so painful about these "articles" is that it's painfully obvious that neither the folks at iSuppli nor the writers regurgitating their numbers has taken so much as a Business Accounting 101 course. That, or they're being deliberately misleading and inflammatory.

    Cost of materials? Even assuming they're right, that is not a line item used in any published report to determine margin or profit. Also, as was previously noted, the subsidies are included in this article, which further muddies the waters.

    The only useful examination I've ever seen (and it was at least two or three years ago; sorry, no linky) took a near-forensic look at Apple's quarterly and annual reports, factored in some unpublished but reliable and industry-standard costs, and came to the conclusion that Apple operated most of their hardware (pre-iPhone, of course) on a 34% gross margin (within a reasonable percentage of error). Healthy, but with the exception of certain loss-leader consumer electronics, perfectly in line with other companies using the same business, sales, and distribution models.
     

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