If iPhone X costs $370, then why are you...

[Newtons Apple]

I recommend hiring a financial advisor if in fact you are paying $45 over the cost of your shirt. Moreover, that $5
Shirt you are wearing was probably made in a sweatshop in some developing country where workers are underpaid and overworked. 😵

The Progressive education is kicking in big time! 😛

 

[webbuzz]

It surprises me how few people understand this. Overhead, general/administrative costs, etc. still have to be taken care of as well and that money has to come from somewhere.

Not to mention websites and news organizations that use it as a clickbait.
[doublepost=1510243515][/doublepost]

Probably less as they make everything from the battery, cpu, LPDDR4 and flash memory, to the OLED display...

Those units are separate from Samsung Mobile. Sure, they might be a little cheaper, but those units are still in business to make money.

 

[Chupa Chupa]

Even if the X is $370 in parts this is a stupid question.

Cows produce milk for free. Why do we pay for dairy?

Corn grows out of the ground just because that’s what seeds do. Why do let farmers and grocery stores charge us for it?

A raw steak costs a restaurant $6 lb. Why do we tolerate them charging $40 to put it on a plate?

Rain falls out of the sky and fills up reservoirs. Why do our cities and towns bill us for each gallon we use?

A barber charges $18 (+tip) for a 15 min haircut. A pair of low end barber scissors only costs $30.

 

[gentleman00]

Curious ... why do you care?[/QUOTE

This is surely a troll.

Do you ask the same when your local coffee shop charges you $3 for a cup of coffee that probably costs them 30¢ in raw materials?

iPhone X, the finished product, costs $370, not its raw material. Apples and oranges comparison (no pun intended). Not trolling. It’s a legitimate question.

 

[pat500000]

iPhone X, the finished product, costs $370, not its raw material. Apples and oranges comparison (no pun intended).

Yeah, but the question is: what's your agenda? Are you trying to make an informative post?

 

[macfacts]

Because there are other costs other than component costs. Such as r&d, facilities, employees, manufacturing, running retail stores, etc

With all that, a fair price is $650

 

[Rob198612]

It costs $370 to make but it doesn’t include how much Apple spent to produce this phone from scratch the countless hours etc....

 

[keysofanxiety]

iPhone X, the finished product, costs $370, not its raw material.

Utter baloney. Source? Other than a concealed orifice?

Have you even read the article you posted?

"Of course, the "bill of materials" does not include costs like R&D and marketing, which are considerable, especially for a new, forward-looking device such as the iPhone X."

 

[Xgm541]

With all that, a fair price is $650

Great. Now you can go and lower the price of the iphone x to $650, we'll all appreciate it. Oh wait, you don't actually work for, or run Apple? That's what I thought.

You don't get to dictate on a forum what you feel apple should be charging for these devices. If you don't like the price, don't buy it and move on. Dictate with your wallet instead of hypothesizing what the actual cost of the thing is and how much a "fair" price is.

 

[Bswartz95]

This reminds me of the Best But thread where people were bent out of shape because they were charging $100 more. You have two choices:
1. Buy it for what they’re charging
2. Don’t buy it.

Not sure why people are concerned with the profit margins. Either pay it or don’t. If enough people don’t buy it, the price will come down.

 

[SRLMJ23]

One word. Totality.

O-H

 

[noobinator]

If they charge what they pay, even including R&D, overhead, marketing, salaries, etc.. then they won't be in business long. A business EXISTS to make money, not to give you the products as cheaply as possible. They will charge what people will pay.

 

[macfacts]

Great. Now you can go and lower the price of the iphone x to $650, we'll all appreciate it. Oh wait, you don't actually work for, or run Apple? That's what I thought.

You don't get to dictate on a forum what you feel apple should be charging for these devices. If you don't like the price, don't buy it and move on. Dictate with your wallet instead of hypothesizing what the actual cost of the thing is and how much a "fair" price is.

Great. Now you can go and delete my post, we'll all appreciate it. Oh wait, you don't actually work for, or moderate MacRumors? That's what I thought.

You don't get to dictate on a forum what others can or can't talk about. If you don't like the topic, don't click on it and move on. Dictate with your posts what is a good or bad topic discussion, stop bumping it to the top of the thread list with your replies.

... Just wow. In a thread about cost and I can't talk about cost.

 

[california_kid]

paying $1000 for it. Is the price justified given the fact that Apple has $252 billion in offshore accounts to avoid paying taxes?

http://mashable.com/2017/11/09/iphone-x-true-cost/#bKolYZlqPmqL

Good question. Buy Apple stock instead of their products and I think your question will change to:

"Why is Apple ONLY charging $1000?"

 

[praterkeith]

because it's our money? you can't think they're supposed to price it at $400 (or $500 or $600). how much are cars really worth to make yet they have markups. houses? my shirt i'm wearing probably cost about $5 to make yet i spent $50 for it.

I’ve been lookin for a good quality $50 shirt, any recommendations?

 

[solo118]

paying $1000 for it. Is the price justified given the fact that Apple has $252 billion in offshore accounts to avoid paying taxes?

http://mashable.com/2017/11/09/iphone-x-true-cost/#bKolYZlqPmqL

Ever hear of marketing, R&D, and overhead?

The price you are seeing is just for a bunch of non-assembled parts. So even if they go out at 50% margin, that's $740 for a bag of parts shipped to your door. $9999 ain't so bad after all if you think about it.

 

[praterkeith]

The markup is definitely high, even with R&D, shipping, etc., but it comes down to value. Apple is selling a ton of these $1,000 phones, they priced it correctly.

Exactly, they Apple knows what they’re doing.

 

[anson42]

Not sure why people are concerned with the profit margins. Either pay it or don’t. If enough people don’t buy it, the price will come down.

To use an Apple example, remember the price drop on the first iPhone from $600 to $400? The market speaks.

Note that Apple's net profit margin averages just under 40% (I think it's net, could be gross, dunno). Using 40% as an example for margin on the iPhone X, at $1000 that would mean the X costs Apple $600 to build (40% of $1000 yields $400 profit). Ok, I'm clearly no accountant but that's how you can look at the cost the product. The BOM at a guess of $370 means all the other costs folks have been trying to educate the OP about run to $230 per phone.

 

[sdwaltz]

If you were running a company, you’d do all you could to avoid BS taxes too.

There is nothing wrong with it. Governments produce nothing and deserve nothing from us.

 

[eoblaed]

paying $1000 for it. Is the price justified given the fact that Apple has $252 billion in offshore accounts to avoid paying taxes?

http://mashable.com/2017/11/09/iphone-x-true-cost/#bKolYZlqPmqL

Uhh...

BOM does not equal cost.

The components cost $370. What about the labour? Manufacturing? Distribution? Packaging? Shipping? QA? R&D for it to be designed in the first place? Aftercare support?

Taking such an overly simplistic view such as this is where the expression "Armchair CEO" came from.

Exactly.


Also, Apple isn't avoiding taxes: https://www.macrumors.com/2017/11/06/apple-jersey-tax-haven/
As it stands, Apple is the largest tax payer in the world.

Come down off that high horse.

 

[Baymowe335]

So build me one for $370 and I'll give you $400.

 

[Chupa Chupa]

Ever hear of marketing, R&D, and overhead?

The price you are seeing is just for a bunch of non-assembled parts. So even if they go out at 50% margin, that's $740 for a bag of parts shipped to your door. $9999 ain't so bad after all if you think about it.

Even if it were for a bag of parts it also assumes every one of those parts is functional and every single assembled units is salable. But reality is, especially during ramp up of a brand new device, the failure rate could easily be 10-20%. For the original Apple Watch an entire factory had to be shut down. That's part of the production cost too that doesn't get calculated in these raw parts totals.

 

[billycuth]

BOM does not equal cost.

This.

/endthread

 

[Baymowe335]

You ‘feel’ but you don’t know that for a fact. Unless, you work for Apple’s accounting department, you wouldn’t know that.

Apple is publicly traded...we actually know a lot, including the iPhone X build cost isn't $370 all in. GROSS margins are 38%.

 

[snatefinch]

iPhone X, the finished product, costs $370, not its raw material. Apples and oranges comparison (no pun intended). Not trolling. It’s a legitimate question.

Did you even read the article? $370 is for the raw materials as no one other than Apple can know the true cost of the phone. All the media can do is give you the cost of the physical parts of the phone, there are other costs that they could only guesstimate.