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iPad Component Costs Estimated to Begin at $219.35
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buy the 64GB iPad and they'll make between $381.15 and $482.85/unit respectively....talk about milk the cow, split the growth
No. No, they won't. Apple incurs other costs to get a product to market. Plenty of other posts in this thread outline these costs.
I'm sure you've noticed, but Apple's almost always the last to show up for a party, and they rarely bring something new that has total feature parity with what's currently on the market.
That usually works in their favor.
Some of you guys here are just outrageous. You think a company is suppose to charge the customer exactly what the components cost them to build the unit? Gimme a break! People need to be paid for labor, R&D, advertising, convenience in terms of local stores for repairs and over the counter purchases. Sheesh, some of you need to understand business better before you accuse a company of blowing up profits. So what if they are, if it's a price you can't handle, don't buy.
"Do you want to spend the rest of your life selling sugared water or do you want a chance to change the world?"
Turns out he should have stayed selling sugar water....
Seeing his business model stayed much the same.
Cut cost like R&D and expensive employees
Increase Margins
Sell Hype
OK so the third one is still useful.
But neither 2 or 3 are going to work without 1 to back it up.
The slate form factor have been around for a long while. A federally funded agency I worked for purchased $250,000 worth of slate PCs in about 1993. The OS was DOS.
I demand that Apple products be a step above everyone else! I demand aluminum construction, lightweight and thin builds, with great battery life and amazing software interfaces! And processing power! I want Flash! And all the extras like 3G wireless need to be thrown in too! And a camera! Apple products need to be light-years ahead of anyone else! Apple's R&D department needs to be working overtime!
Oh, and I demand that Apple products should be just as cheap as Dell and Acer and all those anonymous Taiwanese computer makers! But they still have to be built way better than those competitors' cheap plastic junk!
Yet they get all the credit. Watch how many regular people will say that all the other tablets copied Apple. Even on this site, since everybody just reads Apple news and are unaware of non other computer news, they also fall for it.
Ok, now I am going to wait until the price drops. Thats a fairly heavy markup, much higher then I was expecting.
Seeing the price of the parts, it baffles me why they have a separate 3G version. What ever happened to Apple keeping simple product lines. Why bother having a non-3G version ... it just makes NO sense. $25 is NOTHING.
If they make the 3G one same price as the normal, I will buy a 32GB one.
Seeing the price of the parts, it baffles me why they have a separate 3G version. What ever happened to Apple keeping simple product lines. Why bother having a non-3G version ... it just makes NO sense. $25 is NOTHING.
If they make the 3G one same price as the normal, I will buy a 32GB one.
I take all these tear-downs with a huge chunk of salt. iSuppli has no idea what it cost Apple to design and build the A4 processor and is simply guessing based on the cost of similar chips in the marketplace. Their approach is to attempt to create a bill of materials and extrapolate everything from that. Apple products, however, are a blend of hardware, software and design so simply going by the BoM is a poor way of determining the true cost or profit margin.
The iPad is not attempting to compete with netbooks. It's not a full tablet computer and cannot do everything a netbook can. The iPad is a different type of device that does a different set of things, but does them in such a compelling way that millions will buy it. Some of those people will buy one instead of getting a netbook, but if they do it'll be because the iPad does all the things they want in an ultraportable.
Apple doesn't want you as a customer if you buy a netbook because you can't afford a real notebook computer.
Because, as has been mentioned before, just because the radio part costs $25 doesn't mean that there's no cost of licensing the technology (not to mention the labour and blah blah blah). I read in an earlier post somewhere that the GSM license could be up to $100 (though unfortunately I can't corroborate that).
Otherwise wouldn't the iPod touch and the iPhone be pretty much the same price, save for the cost of the extra GSM/3G radio?
You buy a movie on DVD and you pay $20. That little shiny plastic disc and the black plastic cover can't possibly cost more than 50 cents combined. Why are they charging so much markup??
/etc/toasted
Which means that your first iPad is going to come from an eBay auction sometime in 2011.
Which means that your first iPad is going to come from an eBay auction sometime in 2011.
$30 only just covers the chip used in the tear down add an antenna and GPS chip plus it's antenna no doubt these conponets are either on a small board of their own someone has to build, check then certify the whole thing.
Not to mention Nokia gets kick back for Fair and reasonable terms on patent use.
And it hasn't even left the factory yet. Although factory to consumer cost are already in the wifi model as well.
Funny no one seems to remember stores selling these will want +30% of the RRP to sell these things. Which doesn't leave a lot of the massive markup everyone is so shocked by in Apples hands, except for web sales.
The slates used a stylus for input. Overall, the tablet devices and this particular project wasn't very successful, but it was a pilot project and a good deal was learned from the experiment.
The point is that other computer company sell things for a lot less than Apple, for similar products. I posted a link earlier for a Tegra 2 slate that's much more powerful than the iPad, has SD card slot, 3g, can connect it to a tv and wath 1080p video, all for $325
What exactly where you expecting in regards to the markup?!
Comparison markups:
40% = 4GB iPod nano (fatboy)
51% = 8GB original iPod touch
54% = 16GB iPad (wifi only)
70% = 16GB iPhone 3GS
72% = iPod shuffle 3G
The reason Apple gets the credit is they pay more attention to details aside from technical specs. They focus on a the overall end-user experience.
I'd imagine that nobody complaining about the price has any clue of how retail pricing works. A company doesn't need to worry about what one person thinks is a fair price. If something is overpriced for the market, it won't sell enough. They are going to sell millions of these things, especially at this price point.
It looks like the same people that were whining that it had "better not cost $1000" are the same ones saying $499 is too expensive. Anyone complaining they won't buy one because of the markup over the cost of materials is just trolling. They weren't buying one anyway.
I agree with him too. Nice article.