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Best Buy, Target, Wal-Mart, Amazon and everyone else sells it too. So I don't see your point.

The difference here is the margins for the third party outfit. The food industry allots resellers wide margins for resale.

Apple offers slim to no margins for third party resellers. As an example, when the iPad mini retailed for $329.99, they were being sold to big players like Target, Best Buy etc for roughly $300. The cellular models are sold at no available margin to the retailer, but for those that have partnerships with the carriers receive a bounty for the activation.

I worked at Best Buy for many years. I can tell you that Best Buy made almost nothing ($10 or less) on iPads. The money was made a bit more on the accessories and especially the service plans. For the little margin the store would make on an iPad, they'd go out of business very quickly if that's all they sold.

I'm talking about COKE everybody, not apple. Coke doesn't sell their product for $1-$2 /liter. Walmart, Walgreens, Kroger etc. do.
 
I'm not a moron. I have a degree and two minors (one of them marketing). My dad is also the pricing manager for an international corporation and all subsidiaries so I've been around the conversations that take place. I understand perfectly fine that 16GB makes them more money. The fact remains that the iPad will have the same base storage from 2010 going into 2014. That I find ridiculous as a consumer. For instance, the base MacBook Air in 2010 was 64GB. Now it's 128GB. The base iPhone in 2010 came in 8GB capacity and now it comes in at 16GB. The iPad has stagnated when it comes to storage capacity.

If you read the rest of my comment ...

I never said you were a moron. And I did read the rest of your post.

Considering your education etc., I still expected a more insightful post. The article lists the cost of components and you say it should be cheaper, mainly complaining about storage cost. No offense but it doesn't seem insightful. I'm sure most of your upvotes are not based on insight either, but just simply people wanting things to be cheaper.

Anyway I don't want to get into a cyclical discussion. In the end, I'm sure you can agree that there's more to pricing than simply the cost of the components.
 
I think you are confused. Your other post said:



Now you are comparing iPad 4 vs. the iPad air.

You might want to take a minute to think about what it is you are trying to say before you start typing. Then, post again about what it is that you are trying to say.

I think your reading comprehension needs fine tuning. You wanted to trade your 1st gen iPad, but I replied i told you I have an iPad 4, so why would I do that. My earlier post states that the experience of the iPad hasn't changed since the first gen, which is true.

Don't think to hard. I know you guys around here try your hardest to sound smart, but really, it's not that serious.
 
If you read the rest of my comment I was largely agreeing with these sentiments about cost. The iPad 3 was a huge effort to get Retina out the door before everyone else, therefore the components cost more as they were cutting-edge. The iPad Air shares some of these same components, therefore over time the prices have come down for things like big retina screens.

You're just straight up wrong. The iPad Air shares none of the same parts with the iPad 3. The display is now IGZO and is much thinner, the logic board is completely different, the camera is different, and the battery has changed. Please explain to me which parts are the same between the two models...

Don't question the validity of my statements either because I repair iPads as a job, and its a good business. I make $50 an hour. Is that out of line? Lots of people pay it and keep recommending me to other people. Is that bad business?
 
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I'm talking about COKE everybody, not apple. Coke doesn't sell their product for $1-$2 /liter. Walmart, Walgreens, Kroger etc. do.

Grocery store profit margins are usually 1-2% for most items, with the exception of organic being higher.
 
I think your reading comprehension needs fine tuning. You wanted to trade your 1st gen iPad, but I replied i told you I have an iPad 4, so why would I do that. My earlier post states that the experience of the iPad hasn't changed since the first gen, which is true.

Don't think to hard. I know you guys around here try your hardest to sound smart, but really, it's not that serious.

It's the same device since the first iPad.

Hmmmm...
 
"Roughly 13% cheaper"...
Funny that, it feels like at least 30% cheaper than my iPad 4...
Crap screen and built, puny 1GB of RAM.
Will wait for Air 2 or Pro till next year...
 
You're just straight up wrong. The iPad Air shares none of the same parts with the iPad 3. The display is now IGZO and is much thinner, the logic board is completely different, the camera is different, and the battery has changed. Please explain to me which parts are the same between the two models...

Don't question the validity of my statements either because I repair iPads as a job, and its a good business. I make $50 an hour. Is that out of line? Lots of people pay it and keep recommending me to other people. Is that bad business?

Everyone is missing the point. I'm saying the iPad Air is cheaper because the retina display technology was brand new back then. There wasn't anything else like it in another product. Today retina screens are cheaper because they've been mass produced longer. 1GB ram prices have likely come down (even if it's faster). I'm not sure if the 5MP camera modules are exactly the same, but I don't believe the image quality has increased since then in the back camera. So that's another component that could decrease over time. My whole point is Apple has been making these iPads in volume for years so of course the cost will come down—especially since the Air is largely a thinner, faster iPad 3. And that's not a bad thing. Yes, many components are different but they're also iterations of pieces that have been produced millions upon millions of times.

Why is everyone pissed off at me for saying the iPad 3 was cutting edge compared to everything else at the time (mostly being the first retina tablet) and the Air is an iterated iPad 3? There are no MASSIVE differences for an end-user when using the two aside from speed and weight. And those are compelling reasons to upgrade.

The whole point of my post is that volume production has helped bring down costs. iPad Mini likely has a similar bill of goods (cost) but is $100 less. So I reasoned that the iPad Air's higher margin (historically) might help offset the lower margin of an iPad Mini Retina and even out the margin across the product mix. Does anyone really think that statement is insane? Mind you, I was probably the first one (back in late August or early September?) on the forums to say that the new Mini would be $399 and the old one $299. So I can't be that dumb. Hardly anyone else believed the price would go up. They somehow thought an A7 and other same specs (per the rumor at the time) would result in the same $329 price. Now that was dumb thinking.
 
When did you get your information? One of my friend get a 5s at the reseller cost with $70 discount (one of those mom and pop reseller).. Didn't reseller has to pay salary etc. to their stuff?

If I told you, I'd have to...:D

I'm not sure I completely follow you though, aside from what appears to me that you are saying that cost is ~$580 for a 16gb 5s for a small reseller.

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Grocery store profit margins are usually 1-2% for most items, with the exception of organic being higher.

Huh? My family has owned supermarkets for over 30 years, and the margins are certainly not 1-2%. No business would be sustainable at that rate of margin.
 
People keep buying them because there is value in the product. Thankfully a company can still make money here in America without the government taking over the industry and giving **** away. Well at least most industries, they already killed healthcare. Which by the way, for all you young healthy men under 30, get ready to bend over and pay out the wazoo in the coming years. The socialist plan of "FREE" is going to cost you more a month than the base iPad. So enjoy that FREE, let's help everyone concept.

Apple has fantastic margin for an electronics firm. The rest of this post is pretty far off topic and comes across as paranoid. Every other modern country in the world has cheaper health care costs through universal health care, so "socialism" isn't the cause of higher prices. It's a combination of a lot of things, but insurance companies are definitely part of the problem, and they are given even more power with the ACA. But what industry is America taking over and shutting down? And "giving things away" ?? This just sounds like paranoia to me. Let's just stick to the facts that Apple is again improving on its already impressive margin, and it sucks that they charge so much for cellular/GPS and memory upgrades, but it's a way they sell units at an even higher margin to rich people.
 
I hope...you guys know that it costs money for Apple to have their factories switched over EVERY year for a different design each year. This not including test runs for new processors...
 
If I told you, I'd have to...:D

I'm not sure I completely follow you though, aside from what appears to me that you are saying that cost is ~$580 for a 16gb 5s for a small reseller.

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[.


yes. and we are not counting the profit margin for the carrier that he got his 5s from. So Apple has to pay 10-15% of msrp for the distributor to sell the 5s. Every time Apple release a device, everyone jump up and down about how big a profit margin Apple make from the tear down cost. Apple make a lot of money but no where near what the tear down number show. Iphone has the highest gross margin in the 50-60% range. Ipad gross margin is between 25-32%. This are the number from Samsung trial last year. And from the gross margin, one has to subtract the corporate SG&A (overhead, marketing etc.), R&D (all the engineer salary + equipment for building prototype etc., all the computer system), then tax (26-27%).
 
$253 ain't bad (taking into account at the extreme end Toshiba flash)

Take the best and NOT compare it to the 4th gen iPad.... Make it sound better :p
 
That's almost $300 without the labor of building it. My colleague in the first post thinks it's pretty ridiculous of Apple to charge so much for the 16GB but at already close to $300 without labor, R&D and advertising what do you expect Apple to do to make a profit? Would I love for it to be cheaper? Surely, but at the end of the day it's business and you don't have to buy, just remember that.

I'd normally agree wholeheartedly, but with Amazon and Google selling "loss leaders" that match the iPad on quality and features, I think those prices are getting harder to justify. This is especially true for the iPad mini.
 
I'd normally agree wholeheartedly, but with Amazon and Google selling "loss leaders" that match the iPad on quality and features, I think those prices are getting harder to justify. This is especially true for the iPad mini.

Understandable but you have to keep in mind that not everyone (especially me) will buy a non-Apple product just because it's cheaper than Apple's. "Cheaper" doesn't generally equal the same experience.
 
No arguments there. I wouldn't lower the price either if I didn't have to. From a shareholder standpoint, this is great.

But I'm not going to admire it from a consumer standpoint. I want value. Apple wants margin. These two things conflict. I still want the product though. How much I want that product determines who wins the conflict. Apple's been winning. At the very least, I can soften the blow buying refurb, through third party, or getting a carrier to subsidize part of the cost.

Of course. Some people forget consumers and companies are on opposite sides. A company can do a good job and make products you like, but the main porpouse is to make you buy their things. They are NOT your friend (or, your enemy, by the way :D). If a company wants to be your friend, beware!
It's somehow like if your parents want to be your friend. Parents can be many things (supportive, counsellors, tender...) but they cannot be your friends, it's not a role they can/should have :p
 
I don't think ipads were ever locked and I am almost positive the new ones are unlocked. Hell, we are paying $130 for a cellular radio, we're already being ripped off. I'd be very pissed if it also came locked to a specific carrier!

http://www.everymac.com/systems/apple/ipad/ipad-faq/ipad-design-info-font-where-to-buy-unlocked.html

It was all explained here by "rui no onna", and in short earlier iPads where hardware specific, but now it is free to use any! (w000t!)

iPad 1/2
AT&T: with SIM card slot but only worked with EDGE on T-Mobile
Verizon: no SIM card slot (sold separate WiFi device).

iPad 3
AT&T: with SIM card slot but only worked with EDGE on T-Mobile; no CDMA hardware and does not support Verizon LTE bands
Verizon: with SIM card slot but only worked with HSPA on AT&T and EDGE on T-Mobile

iPad 4/mini
AT&T: with SIM card slot but only worked with EDGE on T-Mobile; no CDMA hardware and does not support Verizon or Sprint LTE bands
Verizon/Sprint: with SIM card slot but only worked with HSPA on AT&T and EDGE on T-Mobile
 
And yet Apple has been hammered the past few quarters because margins have declined. Apple's business model is to make money off hardware. Google's is not. You can't really compare the two.

Fair enough, I've heard that Google pretty much sells their devices at cost. They're more or less a developer-centric product that's designed to showcase Google services.

I wouldn't quite say "hammered" - their profit margins went from 42% to 39% or something like that, right? Anyways they're swimming in money. $100 for 16 GB of flash is an outrage. Flash and cellular radios are the same prices set in January 2010. :rolleyes:

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Because people will pay for it. The value of owning an Apple product outweighs the insane markups on storage. What's wrong with that?

In other words, "cuz they can" :rolleyes: I agree that Apple products are high quality. But $100 for 16 GB is crazy, regardless of the great product it's soldered onto.

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Sounds like you answered your own question.

Your beef should't be with Apple. Your beef should be with the other tablet vendors that are not offering you an acceptable choice.

Nah, I'll blame Apple. "We have the best products, so we'll screw the customer out of every last penny we can" :confused:

I know Apple's always had expensive upgrades. But I wonder if it's due to media/investor pressure. Don't drop the prices to widen appeal? People complain. Lower your margins? Investors complain.
 
It's pretty ridiculous that Apple still charges $500 for the 16GB base model. Should be at least 32GB.

I'm not surprised that the thing is cheaper. The 3rd gen was pushing the limits on what you could do at the time with a giant battery and brand-new display tech. The iPad Air has many of the same components: 5MP camera, same screen resolution, same amount of RAM, same storage capacities. It's probably a big reason why they could make the Retina Mini for $100 less. The Air helps subsidize it.

The primary reason why I refuse to get it. Was considering it, but I literally laughed out loud when I saw Apple was still at 16GB at $500. Only Apple could offer inferior specs and still keep the price above the rest. That's what happens when you put the :apple: on something. :rolleyes:

Coca-Cola is just sugar, flavoring and water.

It costs about 5 cents in materials to make a 2-liter. They sell it for between $1 and $2.

That's a 1,000-2,000% markup. Where are the articles on this? :rolleyes:

CokeRumors.com :p

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Because people will pay for it. The value of owning an Apple product outweighs the insane markups on storage. What's wrong with that?

lol what's wrong with that? Value is the eye of the beholder. If you wanna go ahead and get ripped off by willing buy a product that has specs from at least two years ago (storage/RAM/iOS) then be my guest. The only thing that makes iToys "valuable" are their prices. If you wanna pay more for looks, again go for it. But in the end you could have double the storage and more and spend about the same. Look at the Nexus 10...and the Nexus 10 2 still has to come out. I'm sure the N10 will put the iPad Air to shame specs wise. If Google were to market their line up better, Nexus would truly give the iPhone and iPad a run for their money. They're great products running a great OS. If more knew about it and gave them a chance, Apple would be forced to make the iPad more competitive instead of relying on their user base going "oh it's 1mm thinner and 10 grams lighter!!!!!! MUST HAVE IT :eek:"
 
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