Apple spends less than 3% of its revenue on R&D.
http://gigaom.com/apple/how-apple-gets-away-with-lower-rd-spending/
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iPhone 5 Component Costs Estimated to Begin at $199
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Apple spends less than 3% of its revenue on R&D.
http://gigaom.com/apple/how-apple-gets-away-with-lower-rd-spending/
Apple
I know the prices seem obscene to some. But those people have got to remember that Apple isn't a Charity.
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Add to that the cost of the iOS
I know the prices seem obscene to some. But those people have got to remember that Apple isn't a Charity.
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Add to that the cost of the iOS
You probably think that aluminum in iPhone costs more than $2
Aluminum (or plastic) is not what defines the quality and cost of the device. As it turns out iPhone 5 is a relatively cheap phone. Nothing surprising here. Given the fact that Apple skimped on many components (lower resolution screen, no NFC chip, no second radio chip, just 1GB of RAM etc.) its BOM is lower than the competitors. Here are some BOM numbers for other phones:Nokia 900 - $209
Samsung Galaxy S2 Skyrocket - $235.50
Link
I have not seen numbers for Galaxy SIII but they should be higher than that for Galaxy S2 Skyrocket.
This puts iPhone 5 into a upper middle class among smart phones but way behind the elite phones.
So what do you prefer, Apple having so much money they don't know what to do with it, giving back billions in dividends, or a cheaper iPhone?
Apparently it is all about stocks in these modern times. Greed, speculation and stocks keeps the world ticking. Until a new Wall Street collapse.
Apparently it is all about stocks in these modern times. Greed, speculation and stocks keeps the world ticking. Until a new Wall Street collapse.
Yep, capitalism at work. Demand is there at the higher prices, why reduce them?
I'm sure they have marketers to try to figure out what price nets them the most profit (balancing how many people will buy vs. profit per device).
LOL, I'm reporting this as a troll.
Anyhow, R&D is reported as a separate line item in Apple's cash flow statements. It's not part of BOM, COGS, etc.
MacRumors (and a lot of readers) can never seem to understand this simple point.
I prefer having a cheaper iPhone. That also isn't going to happen when the demand is so high. They're not a charity. They are there ultimately to make profit and they will work to make the most profit they can. Whether we like it or not, that's how it works.
If demand isn't so high, they might lower prices (Or offer more for the price). But, please tell me, do you really expect them to be "nice" and reduce their profit? Cause if so, you need to be less naive. That's not how corporations work. Apple is not your friend (and neither is google though google lately has a lot of people fooled they are).
That is not the margin because the list does not show the COGS. Most obviously, the software cost is missing.
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But many of the posters think the difference between the no-contract price and the hardware BOM is the margin.
Well, that's not quite true. Higher capacity storage models have more memory chips which need to be soldered on... using $170 worth of labor and solder
All of the iPhone sizes use a single memory chip.
R&D would not be part of the COGs. The big gaping hole is the software cost.
So we are getting phones at cost, how much profit is being made by the carriers with the data plans?
Sorry your wrong. Apples total R&D budget for 2011 was 2.2% of revenue. And has been falling for years. Considering companies like Google and Micorsoft spend at least 12% of revenue. Apples spending is pathetic.
I'm willing to bet software is one of the most expensive components for apple. Android makers get their source free from google and write small customizations around it, device drivers, vendor software etc, but nothing from the ground up.
I also pointed out it is not part of the cost.. Not sure what you are trying to say. Maybe you misread my post.
You're carrier of choice pays an additional $400+ on top of what you pay to Apple.
You are correct there, yes... but like others, we are most upset about the fact of how much we pay for extra storage. There is an addition $90 of profit in the 32 GB model compared to the 16 GB. and there is an addition $169 of margin in the 64 GB model.
If they charged $199, $249, and $299 on contract. Their margins would still be huge, and there would still be additional margin on larger capacity versions. An additional $40 on the 32 GB model and an additional $69 on the 64 GB model (That is just additional margin compared to the margin already built into the 16 GB model).
That is why people may be upset. It did not take any additional R&D for the 64 GB model compared to the 16 GB model. Just different RAM, meaning we pay $200 additional for something they pay $31 additional for...
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I thought it was $450?? Or Do they get a discounted rate before they give us a subsidy?
Don't be an idiot. Yes, Apple needs to spend money on R&D, manufacturing, etc..but the fact that they have 50B+ USD in the bank means they definitely aren't hurting and they have very healthy margins. Grossly overcharging a consumer for things like more RAM does make Apple greedy.