It would be valid for Microsoft if Microsoft sold a computer, though it probably leaves out the paperwork.
The problem is that for a computer maker such as Dell, the price that would have to show up is the entire license fee.
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iSuppli Revises Entry-Level iPad Component Cost Estimate Up to $260
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It would be valid for Microsoft if Microsoft sold a computer, though it probably leaves out the paperwork.
The problem is that for a computer maker such as Dell, the price that would have to show up is the entire license fee.
Apple epically trolled the tablet industry with a $499 Super iPod Touch. It's a cripple fight for the remaining slim profit margins using Atom and Windows 7.
For Apple, if it isn't profitable, they don't do it. So, it is profitable, not on a large scale, but it is. Also, lowering iPad costs by $50 for the lower-end model would be an insta-hit.
That they did. Also, take into account, these tablet makers are trying to pretty-up or optimizing a desktop class OS into tablet class components. Not an easy job, and it makes using said product more of a hassle.
That's the price Verizon is selling a USB 3G stick to consumers for. I'm certain Apple is paying less than that for a 3G chip.
In fact, looking at the iPhone 3GS teardown, isuppli claims that all that stuff (3G + GPS) costs less than $20. I know I said I don't trust their numbers, but I'd like to think they're not SO far off that they'd say $20 when it's really $129.
Even if it's not $20, I'm willing to bet the real number is still under the $60 that I suggested.
I have to admit that I found a HP convertible tablet very endearing when I got to play with it. I especially enjoyed the hand writing recognition. The keyboard worked very well and I was surprised. It was running Windows 7.
The Courier doesn't use anything, since it currently doesn't exist.
Unless vapour runs on Intel.
The App Store does not makes the same gross margin as Apple's hardware sales.
Apple's business plan is to use content (media, apps, services) to drive sales of its high-margin hardware. If Apple makes a small profit from the iTunes Store, App Store, MobileMe, etc., they're happy with it, but they don't expect those to contribute significant amounts to the bottom line.
You're missing his point. The point is that claiming that the cost of the DVD (or download) is all that Windows really costs is the same as claiming that the parts of an iPad are all that it really costs.
In other words, he's saying they're BOTH ridiculous arguments. So pointing out that one of them makes no sense doesn't really matter. He knows.
From the perspective of a consumer, I don't care what the thing costs to build. I care about the value I get from it. From my perspective, $699 is cheep.
The more interesting question is:
How Much do they really Sell it for?
It is very simplistic to think of the iPad as something that has $260 worth of parts and they sell it for $495, so their profit is....
The reality is that Apple looks at the iPad as not a traditional computer but as a service termination device just like the telephone/cable companies look at DSL/Cable modems, cable boxes, satellite receivers, telephones, cellphones, etc. They are simply a piece of hardware necessary for a customer to subscribe to their iTunes service which enables Apple to generate ongoing revenue. The sell price of the box is only really related to the hardware cost if that's their only source of revenue. If it is going to generate a large amount of ongoing subscription $'s they will sell it at cost or even free.
When Steve Jobs talks about iPad being magical, it is really the ability of the device to generate revenue for Apple long after it leaves the store that he is referring to. The ability for a computer company like Apple to begin extracting revenue from companies like Amazon, Blockbuster, Nintendo, computer game stores and even the newstand on the corner is what is magical!
I would like to see Apple's estimate of how much revenue the average iPad will earn them over it's lifespan. Then you can see what kind of profit they are making.
How Much do they really Sell it for?
It is very simplistic to think of the iPad as something that has $260 worth of parts and they sell it for $495, so their profit is....
The reality is that Apple looks at the iPad as not a traditional computer but as a service termination device just like the telephone/cable companies look at DSL/Cable modems, cable boxes, satellite receivers, telephones, cellphones, etc. They are simply a piece of hardware necessary for a customer to subscribe to their iTunes service which enables Apple to generate ongoing revenue. The sell price of the box is only really related to the hardware cost if that's their only source of revenue. If it is going to generate a large amount of ongoing subscription $'s they will sell it at cost or even free.
When Steve Jobs talks about iPad being magical, it is really the ability of the device to generate revenue for Apple long after it leaves the store that he is referring to. The ability for a computer company like Apple to begin extracting revenue from companies like Amazon, Blockbuster, Nintendo, computer game stores and even the newstand on the corner is what is magical!
I would like to see Apple's estimate of how much revenue the average iPad will earn them over it's lifespan. Then you can see what kind of profit they are making.
Nope it's not.
But somehow the PC tablets (full blown computer os) has not done well in the past decade.
The $500 JooJoo is barely useable as a device according to reviews.
Well, HP has practice with their notebooks when it comes to handwriting, so I expect them to shine in that sense. However, we know Windows 7 isn't the best at multi-touch.
Your comment ++
Sometimes as a writer or blogger, we tend to not make our point as clearly as we could. Art is cool and all. Sometimes it is better just to be blunt.
Joojoo is $500. I don't know where you got $550.
Maybe the chip assembly is $20, it doesn't surprise me, and compared to the competition, doesn't bother me. I doubt putting the same circuitry in USB packaging costs much more, let's say a $25 total for the manufacture cost of a USB 3G radio. Apple is still offering a better value than anyone else. You can buy a computer with data built-in, but you're going to be stuck with a 2 year contract to use it. You can buy an entire netbook for the money you save by not going with someone else's data plan.
How about the ModBook? I haven't had a chance to use OS X on one of those.
Touch typing was very usable when you made the keyboard larger and rotated the screen. Handwriting with my finger just felt so cathartic.
Has iSuppli seen the contracts between Apple and its suppliers? Unless they have their numbers are pretty much useless.
I am impressed with this direction Apple has taken. With Apple's track record of extremely inflating hardware cost its always nice to see that they are willing to accept more reasonable margins.
I have always thought if apple computers became more accessible , in regard to price, they would take off.
Imagine AAPL if apple would have not gouged when Vista was out? I'm sure we would see a much larger market share in the Home PC arena.
But, it seems Steve wants to keep Apple computers overpriced and underpowered.
Let's just hope that the new Mac Pro line and new Macbook line have similar margins to the iPad.
I have always thought if apple computers became more accessible , in regard to price, they would take off.
Imagine AAPL if apple would have not gouged when Vista was out? I'm sure we would see a much larger market share in the Home PC arena.
But, it seems Steve wants to keep Apple computers overpriced and underpowered.
Let's just hope that the new Mac Pro line and new Macbook line have similar margins to the iPad.
And doubly pointless because we don't know the costs for "numerous other expenses such as research and development, marketing, and licensing" --- nor the iPad's 'share' of costs for store staff, infrastructure, distribution and so on.
For all we know, the lowest price iPad is sold at a loss. Bare component analyses like this are just empty fantasy. And yet it's done every time.
Touch typing is usable since it isn't albeit a multi-touch heavy thing. It's when you try to mimic Apple's swipe, pinch, scroll with x fingers that things get hairy and nasty for Windows 7. It can't do those very well.
Yes, HP handwriting technology is very nice. Really well built. Hope they continue developing it.
If you're talking about trackpads, Synaptics drivers are a must for multi-touch. My coworker's Studio 17 works well under Windows 7 compared to Apple's own Boot Camp drivers on my MacBook.
Otherwise, I'm not as well informed about touchscreens. A stylus seemed like a must to me after using the handwriting recognition built into Windows 7.
Apple might have had more market share, they would have had less money. You never win if you are in a race to the bottom. The way to make money is to charge every penny you can get away with and provide a better product. Let the scrap dealers fight over the bottom of the market.
Note: I went to the car dealer the other day, he said that he was selling every car at 10% below his actual final cost. I asked him how he planed to make any money. His answer? volume.