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iPhone XS Max Component Costs Estimated at $453 [Updated]
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No, I’m just saying they make good money off iPhone’s.
There is no overhead labor or engineering by offering 128GB base (vs 64). In 2018!!!!
The reason why Apple does it is to push people into 256 (which is eXSessive, but ultimately gives Apple even more profit). 64 is not enough these days (Before you all start saying why you need it - 4K60 videos, which Apple specifically bragged about). And not everyone wants to use the iCloud).
As i said before, Apple can do whatever they want as long as people continue to fall for this bs, but that still make them a douche company, while saying that they care about customers.
Of course you’d wish, but it’s science fiction.
That’s not how it works. The price is material is different (and much lower) than the total cost per unit.
Don’t be silly to assume that’s all profit. There’s a lot more that going into a phone then parts...
Yes, there’s many, many other costs. Not the least of which is legal.
Still, they put in a hefty markup. That’s how they paid for the spaceship.
Still, they put in a hefty markup. That’s how they paid for the spaceship.
Not true...I had a chat with Tim and he reckons that they have a profit of $3.57 on each device!
In all seriousness, and as everyone else mentions, these are NOT the real costs of developing such a device and getting it to market, not even close.
No matter what people say, Apple do make great products, there's no doubt about it. People might complain but actually their quality is very high and more times than not they do work very well. Yes there's been a slip more recently in QA in terms of bugs creeping into the system but actually comparing that to other OS's (and I have) it's few and far between. Sometimes I wonder if Apple built a rod for their own back in terms of expectation from people because their quality bar has been so high in the past. As with anything there's always room for improvement but in the grand scheme of things, I personally feel they do a great job....even if it does hit the wallet.
In all seriousness, and as everyone else mentions, these are NOT the real costs of developing such a device and getting it to market, not even close.
No matter what people say, Apple do make great products, there's no doubt about it. People might complain but actually their quality is very high and more times than not they do work very well. Yes there's been a slip more recently in QA in terms of bugs creeping into the system but actually comparing that to other OS's (and I have) it's few and far between. Sometimes I wonder if Apple built a rod for their own back in terms of expectation from people because their quality bar has been so high in the past. As with anything there's always room for improvement but in the grand scheme of things, I personally feel they do a great job....even if it does hit the wallet.
While a certain markup is undeniable, your post is incorrect. By changing a component, even if it’s just memory, they have to create an adapted line of production, track material, perform custom testing, and most likely submit and follow different paperwork for government approval. There is some important added cost there.
You and TIMUSCA are 100% correct. Workerbees are understandably clueless about true business costs. As in this case workerbees see component cost and think “Oh, we will tack on a bit more for profit”, nope sorry it does not work that way. There is much more costs to any business pricing model than component cost. Business charge three times or more over their costs. They have to have money for what y’all mentioned plus money for their next purchase for selling to the public, many types of insurance, taxes, put money in savings, rent and utilities, upkeep money for the business, must consider shrink as well, left over money to feed their family and family needs. A business in a mall or strip mall and the like there is also CAM. A business needs to consider new and replacement equipment costs, contingency funds, money for raises and travel, employee expenses are astronomical, wow the cost list goes on. Component cost and sales price are not a zero-sum-gain, a business can not stay in business with even 100% pricing over product cost. Workerbees, go start and run a business, you will be shocked. Some folks sold their buisness to an employee yet remained on as an employee, they said they cleared more money as an employee with considerably less headaches.
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Your entire answer is a non-sequitur.
Sure. But does your 'lot more' account for an approx 75% raw profit on cost of goods?
I don’t know what you’re talking about, this is how every business works. You have your parts, then labour, in this case there’s manufacturing, shipping, advertising, the development cost not just for the hardware but the software that will support it for the next 5 or more years. Theres the overhead to keep the company assets paid (taxes, electrical bill, salary’s, waste, cleaning, etc) and only after all that is added up can you cone out with maybe 10-20% profit. That’s why older phones go down in price, you’re no longer paying the development or advertising costs anymore, parts are cheaper and more.
There’s a lot more to a product and service than what it costs for parts...
You think it should cost $450?But it has a logo.
I'll give you all the components individually and you see what you can do with them with no software or guide on how to put them together.
We'll also just skip paying the engineers, scientists, and other geniuses that designed these devices.
Probably. Personnel is the highest expense for any company and government agency. Cost of goods are a relatively minor expense.
With Apple's economics of scale, i very much doubt thats the case. The real issue here is good old greed and ability to milk what market will bare (Would love to see the % of people who pay for the phone outright, vs those who have to finance it, or even better, how many sales would not happen if financing was not 0% or was not available at all). There is also working 20 and 30-somethings who live with their parents and spend hundreds on monthly cell phone payments, because you know, they have to show off the latest toys to their peers
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Apple's profit margin as per their profit and loss statements is 21% (and falling compared to previous years). I think that's a totally valid profit margin given the value the products provide to the user.
To think Apple overprices its products is a reflection of how poorly people understand business and technology development.
Apple products are expensive when compared to other products in the market. But they are not overpriced for what they are. That statement comes from actual audited data. Not some 3rd party analyst estimation or ignorant imagination of the common man.
To think Apple overprices its products is a reflection of how poorly people understand business and technology development.
Apple products are expensive when compared to other products in the market. But they are not overpriced for what they are. That statement comes from actual audited data. Not some 3rd party analyst estimation or ignorant imagination of the common man.
Yep. It's pretty much the definition of capitalism. Very few are at the beginning of the value chain. The vast majority of enterprises small, medium and large buy things from elsewhere, add value to them (in this case by manufacturing and software development). All the things required to add value cost money (machines, energy, R&D, staff, legal and compliance). If you're good and your output is desirable you make money at the end of all this. If you don't like this system, Cuba awaits.
Do you think that Coca-Cola pays a can of soda $1.25? I’d be surprised if they pay more than $0.05 to manufacture one, actually I read estimates at about $0.02/can
Then you have to add to the cost of:
- Personnel (Same as apple)
- Shipping to stores (same as Apple)
- Advertising (same as apple)
- Legal crap (same as apple)
- Taxes (same as apple)
- R&D (same as apple, probably on a lesser scale)
- Repairs and adaptation of production lines (same as apple)
- Capital improvements (same as apple)
- Government crap (certifications, etc.) (same as apple)
- Unexpected expenses (same as apple)
- Sale Returns (same as Apple).
Don’t think they actually make that much profit per device. There more than just the parts for and product and service. You’re looking at manufacturing, shipping, advertising, research, development of not just hardware but software, company overhead and more. In the end they probably end up with no more than 10-20% profit on these devices and that normal for any business.
So it makes sense that the 256 GB (storage mid-tier) 2018 iPhone Xs Max is more expensive than the 64 GB (storage mid-tier) 2015 iPhone 6s Plus was at launch. Just not that it's $400 more expensive ($1,250 for the Max vs. $850 for the Plus in 2015).
Thats a strawman and has nothing to do with my argument. My argument was purely on 64 vs 128 base. And the reason Apple does it has nothing to do with what you posted above - the reason is simple greed and sheering the sheep which allow to be sheered
Geez people are getting so defensive about this. All I said is they make good money off iPhones.