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It's basically a Microsoft Kinect miniaturised, so not much research needed.
PERFECT example, but not in support of your argument. Because, apparently, way more research WAS needed. The Kinect sucked, I had one and tossed it in a drawer in my TV Cabinet. The Kinect was an utter failure. By every sense of the word “failure”. Not only killed by Microsoft as a result of that failure, but not even reborn even for the new XBox One X releasing in a day. And the Kinect had the ability to run off the processing power of a (repurposed - but real) PC /desktop computer wrapped in a console case - and it still was awful.
 
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$700 is probably correct. 30% profit is what most companies would love to achieve

How true. Some hardware companies in the past have got their margins to 40-45%. And to see how much margin there is in primarily software, Microsoft's recent quarter was 66.3% (anyone want to complain about the price of Office, game console?). Retail, you are looking at 3.5-4% margin.

Not reflective of iPhone margins, but recent reported quarter, Apple's margins were 37.9%. And their forward looking statement is projecting similar number for 2018.

https://www.apple.com/newsroom/2017/11/apple-reports-fourth-quarter-results/

Guessing iPhone has higher margins than Macs/watches/iPads, as that is Apple's bread and butter and funds everything else.
 
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Even if u buy in bulk, its always cheaper, but u get the same component/products in a smaller size and it can't be much cheaper. if the quality has to be perfect. At some stage u'll loose profit.

I understand that Apple run the business model - look at the following example:

- Apple get massive discount from manufactures for the various parts in order to make iPhone. (Huge Profit)

- You won't get much discount from UK distribution to reseller.....

- Apple wont give you much discount if you buy bulk orders for the business.
 
wonder how much the R&D was for the FaceID
They’re a good business so no knocking that, but damn do they make a ton of money per unit. The markup is insane.


Its typical. For any company that developed their own products they typically aim for a 100% profit margin per unit. You have to remember that R&D costs are astronomical.
 
I like how people will quote these estimates like gospel and will question the retail price. They seem to forget R&D, shipping of parts, final assembly and delivery to retail. These are all costs that need to be considered.

And other expenses and overhead such as office space, utilities, payroll, advertising, and so on. For the most recent quarter, Apple's net income was 20% of revenues.

As a comparison, JP Morgan Chase is around 25% and Coca Cola around 17%.

Apple currently spends around 12 billion a year on R&D.
 
So ~$200 to make an iPhone 6, sold for $650 made Apple about $400-$450 a few years back.

Now $350ish to make iPhone X, sells for $1,000 so makes Apple about $650.

Wow, shows how much markup Apple (or any manufacturer charging $800+) is making. Crazy

No just shows that you don’t bother to read anything anyone writes..
 
This really is nonsense. These devices are not constructed from Legos. The aggregate cost of the “bricks” only accounts for the variable costs of production. The fixed costs of production (R&D, marketing costs, etc.) are substantial and also dynamic. The media really sucks when it comes to headlines -and maybe we are to blame for being so succepible to falling for clickbait. There is value in the content of this article, namely, the cost of the physical components of this device, but to suggest an equivalency between that and what it costs to truly bring one of these devices to market is an insult to the intellegnce of us all.

Truly. These numbers also don't include the cost of actually assembling the product. Apparently the pieces just fly together as if by magic.
 
I understand that Apple run the business model - look at the following example:

- Apple get massive discount from manufactures for the various parts in order to make iPhone. (Huge Profit)

- You won't get much discount from UK distribution to reseller.....

- Apple wont give you much discount if you buy bulk orders for the business.


Well no -

- 30-40% profit

- because Apple don’t tend to resale - John Lewis gets 20% - I know this for a fact as I know their resaler margin.. they don’t even offer staff discount on iPhone - they do on Mac / watch etc

- you can get up to 25% discount on business it builds up year on year and depends what you buy

If a product CAN be discounted a lot.. guess what..it was being sold too much in the first place. I had a double glazing salesman (Everest) go from 22k to 12k in an hour! ( went with a local firm for 8k )
 
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I don't buy that for one minute.. Sorry. I was in manufacturing for many years and set prices for products and subassemblies. Almost all companies have a pricing structure that is pretty uniform across product lines. There would be up charges for certain things, but generally you are not going to see a huge margin swing from one product to the next.
Prices are set using cost of components which are influenced by expected volume, cost of labor which is influenced by ease of manufacturing, overhead which in apples case is static, R&D, shipping, margin, etc. Marking may be set somewhat by expected volume.
 
These costing are literal bear minimum.

As the articles says
Marketing/adverting
Wages - designers / Apple store / internal / helpdesk - many many others
R+D
Tooling
Taxes
Software

Are not included!

Double it at least and then you’re about right... $700 is probably correct. 30% profit is what most companies would love to achieve

And over the lifespan - the parts will get cheaper and profit increases.

I never get that EVERY year this BS post pops up without the RD estimates - they are guessing everything else so why not?

No just shows that you don’t bother to read anything anyone writes..



Just shows you that most people don't read or can't comprehend what is in the article. This thread is the same every year, one side calling Apple thieves and the other saying the estimate is wrong.

The only thing that is debatable is how much does R&D, labour, Marketing and operating costs contribute to product cost. Since Apple just reported gross margins of around 38%, it's not that hard to figure out the other costs associated with making iPhones.
 
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the iPhone X has a gross margin of 64 percent, higher than the iPhone 8's gross margin of 59 percent.

This is a very misleading statement and article in general, as always. It doesn’t factor in any of the R&D involved, leased patents, salaries of everyone involved, etc. While it does, in fact, have a profit margin, any business savvy person would know the cost is far more than just the parts.
 
HS look only at the price of raw components and do not take into account other iPhone manufacturing expenses like research and development, software creation, advertising, and distribution.

I would love to know what these costs are. I bet they are pretty high.
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Because they don’t grow from trees

If you were every a farmer you would know growing a years crop is the cheap part. Operations are where the real expenses are.
 
And how many times has Tim Cook said these component cost estimates are BS yet every rumor site still reports on them as if they’re newsworthy.
 
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Oh my gosh...a company is actually wanting to make a profit.

Please feel free to send Apple an extra $200 as a TIP after you purchase your iPhone X for a job well done since you're feeling so generous.
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And how many times has Tim Cook said these component cost estimates are BS yet every rumor site still reports on them as if they’re newsworthy.

What's Tim supposed to say with regards to high profits? Admit to screwing over their customers?
 
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