iPad Component Costs Estimated to Begin at $219.35

[saxamoophone]

What R&D?

Besides the somewhat custom processor, this was by far a product done on the cheap, with very LITTLE new or interesting things being developed or researched.

Off the shelf components, with an existing OS != Expensive to produce.

Those fancy Mac-Office apps aren't free. Not to mention apple makes MAD MONEY off apps OTHER people produce.

Bottom Line is this: IF (and this is a big if) this takes off, Apple is going to make a killing.

 

[askewed]

Never miss an opportunity to overreact and complain...

Everyone loves that Apple has cash to acquire companies and buy server farms but they hate that they make a profit on their products. R&D, campuses, employe payroll, benefits, stock dividends, law suit defense and the probably 1,000s of other costs that they have all have o be paid for with those profits.

Plus, it's customary for Americans and their companies to, you know, try to make a profit.

 

[tito2000]

Hey Sculley

The markup on syrup water is insane.

"Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?"

 

[Steve Jobs.]

R&D - $1 buzillion

im Steve Jobs

and im here to say that we spent $1 on R&D because all we had to do was make the Ipod Touch even bigger.

the hard part was deciding HOW BIG?

so we sent our best R&D executive to the streets of California to find the first homeless person so that we could ask him to pick a random number between 5 and 20.

He picked 9.7

needless to say, we paid him a hefty sum of $1 for his extensive help in the development of the iPad.

 

[iMLo]

Why everyone base all arguments on hardware only?
Ok so you got all that parts on your desk assuming that you got that knowledge to assemble it. Now what can we do with all those parts? Hmmm...I don't know what I can do with all that. So Apple steps in and tell you iPad and charge you for it. So you build you iPad and then you have realized that there is no OS in it. Well....you got the idea now?

Do you even know how to speak English properly? Or are you just drunk!?

 

[tknelson]

I'm still hoping for a student discount. $50 seems doable but if they did $100 (unlikely) I bet a lot more students would jump on board as it would be a lot more competitive with netbook prices.

I wonder why the iPad components are so cheap? Perhaps because they don't need to be as small as the iPhone ones?

You do realize a 16GB iPhone 3GS had an estimated cost of $179 when it came out? The Nexus one is the same within a few dollars.

BTW, I can't believe all the whining in these threads. Just unbelievable.

 

[snowleopard2009]

Yes we do

No, we DON'T know that.

Fact of the matter is that Apple has pretty much average operating margins for manufacturers. It's an urban myth that they're fat. (For example, these costs don't include R&D. Or transport costs. Or overhead for the company)

They release them every quarter. 30.13% for last quarter. Dell was 4.47%.

 

[Erwin-Br]

And uncle Steve is laughing all the way to the bank.

 

[The Mad Hatter]

I wonder... did those estimates figure in licensing fees? Because, correct me if I'm wrong, Apple needs to pay-off someone for the tech they didn't develop.

...and if you guys want to talk markups... your forgetting the biggest offenders of all time.

The OEM printer ink companies (ie. Canon, Epson, HP, etc.) They sell some off the most expensive (price <> volume) liquids on the planet (next to women's perfume.)


tMH

 

[Corruptitudes]

Gasp! They're trying to make a profit? Say it ain't so, Steve!

/Though I think Apple messed up. They should have had this thing go on sale the moment it was announced. I would have had my credit card out. The longer It's been since the announcement, the more likely I am to wait to see if the high end versions drop in price.

Im all for a company to make profit. However gouging the customer is not the way to do so.

For instance, Im interested in the 16gb with 3g Ipad, according to this article it only cost $257.65 to make, yet the retail is $629.00. Thats $371.35 in profit. Now Id be wiling to let them have half that profit which totals $185.68. Add that onto the cost of the device, which would come out to $443.33. Round it up to $450 bucks for marketing purposes and you would be selling them till their out of stock and still taking money to the bank. R&D? please...There are minor tweaks to the OS to allow for the new hardware since this is an Iphone OS. Development costs would be included in the manufacturing costs..which if this article is correct, its $10.

 

[tito2000]

He's not the only one...

And uncle Steve is laughing all the way to the bank.

My $100 in Apple stock purchased in 2001 could buy me two 17" MBPs. I'm not too sad about the whole profit margin thing.

 

[iMLo]

They release them every quarter. 30.13% for last quarter. Dell was 4.47%.

Thank You. That's what I was trying to say - though I thought I heard it was something over 40%. Oh well, if you looked it up I'm sure you're right.

 

[DUSTmurph]

.

 

[DUSTmurph]

Well, if everyone's so upset at greedy Apple for wanting to charge $499 for a device that supposedly only costs them $220, then the easily solution is to just buy one of the myriad of other similar 10" multitouch tablet devices priced much more reasonably, say, $300 for the 16 gig version.

Oh, wait...

Either that or buy the shopping list of parts and assemble it yourself. I'd LOVE to compare the quality.

Also, I understand that anodized aluminum is pretty expensive. Is the aluminum and the glass covered under "box contents?" or does "box contents" mean the packaging and accessories?
Either way, the list is missing one of the two.

 

[dejo]

They release them every quarter. 30.13% for last quarter. Dell was 4.47%.

Dell != average.

 

[miketcool]

How much more would it cost to build Apple products here in America? That would be revolutionary. I wouldn't care if components were made and shipped in from overseas, but MADE IN AMERICA. I would never say another negative thing about Apple again. Unless of course they were making them here using children without benefits or safety too.

 

[NT1440]

How much more would it cost to build Apple products here in America? That would be revolutionary. I wouldn't care if components were made and shipped in from overseas, but MADE IN AMERICA. I would never say another negative thing about Apple again. Unless of course they were making them here using children without benefits or safety too.

Healthcare costs seem to be the biggest thing keeping jobs from being held here in America. Look at detroit, those companies basically crumpled under the costs of generations of workers needing healthcare.

 

[iMLo]

My $100 in Apple stock purchased in 2001 could buy me two 17" MBPs. I'm not too sad about the whole profit margin thing.

How? The lowest I saw AAPL in 2001 was over $7, and now it is less than $200 (A great jump to be sure), but that only turns $100 into about $2,800

You could surely buy 1 MB Pro 17" - Which is a heck of a good deal for $100!

 

[Steve Jobs.]

And uncle Steve is laughing all the way to the bank.

no, i don't laugh.

i just smile an eerie smile knowing how amazing i am

Laughing is for obnoxious windows users, not elegant mac users.

 

[mac jones]

People will buy them at that price when they're forced to dump them at cost don't you think?

 

[paradox00]

and people told me i was crazy that apple should sell the iPad as the same price as the ipod touch.... $199. $299. $399... and $330, $430, $530 for 3G versions

but people don't want their AAPL stock to plumit down....

You were crazy. The material costs are higher than your base price and there are a lot more costs to the iPad than the materials alone. How many years of R&D went into this? How much was PA Semi again? Marketing costs? Licensing costs? Legal costs? Although I don't think you would have found many people who didn't think the top end price couldn't come down at least a little bit.

Note: They haven't torn an iPad apart, this is only a best guess anyway.

 

[tito2000]

How? The lowest I saw AAPL in 2001 was over $7, and now it is less than $200 (A great jump to be sure), but that only turns $100 into about $2,800

You could surely buy 1 MB Pro 17" - Which is a heck of a good deal for $100!

A couple of splits handled that nicely. I forget the dates, but it split twice 2-1.

 

[gt1948]

False Data Not a true picture

Bloomberg BusinessWeek reports on new estimates from market research firm iSuppli detailing component costs for Apple's lowest-priced iPad at $219.35 plus an additional $10 in manufacturing costs, compared to a retail price of $499. While the component cost calculations do not include such expenses as research and development, software, marketing, distribution, and patent licensing, the tally still suggests that Apple is set to make a healthy profit on its new tablet device.iPad models offering 3G wireless connectivity will carry a $130 price premium at retail over the corresponding Wi-Fi-only models, while iSuppli calculates that the additional cost to Apple is only approximately $27.10 ($24.50 for 3G components and $2.60 for GPS). Other items of interest included in the estimates are the 9.7-inch multi-touch display at $80.00 and the custom Apple A4 system-on-a-chip serving as the brains of the device at $17.00.

A report earlier this week claimed that Apple executives have left the door open to iPad price cuts if consumer demand fails to meet expectations, and iSuppli's estimates appear to suggest that the company may have sufficient profit margin on the device to lower retail prices if necessary.

Article Link: iPad Component Costs Estimated to Begin at $219.35

And what of developement cost, advertising, marketing, packaging, shipping, assembly… Oh there is so much more than just a parts list!

 

[Ademius]

I see the 16gb getting phased out quickly, like the 4gb iPhone. Didn't it get canned after like 7 months and they added a 16gb model?

Actually, the 4 GB model was discontinued in the matter of about 3 months after release, being released in June, and getting discontinued at the time of the 2007 september iPod event.

See link: https://www.macrumors.com/2007/09/05/8gb-iphone-price-drop-4gb-iphone-discontinued/

Apparently demand was weak for the low-end model. I will be interesting to see if demand holds up for the low-end iPad model, with 720p movies, space is going to be eaten up really fast.

 

[a.gomez]

god how i want this thing to fail! people can not be this much of a Cow not even for Apple