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iSuppli Revises Entry-Level iPad Component Cost Estimate Up to $260
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Obviously the ModBook is little better than the Windows versions, and for exactly the same reasons; There's not a single touch-centric app on the open market for a full-fledged OS tablet device.
Your math is wrong, not the article. He said the price of the part was up by $15 from what they expected, not up from $15.
Price & Quality do not have a direct relationship.
in fact it is often the opposite. Efforts to increase the quality of a device often lead to lower costs in manufacturing and the overall price of the device.
Dave
Still, it's pretty amazing to me how Apple can build such a quality product for such a small price.
Kudos, Apple!
in fact it is often the opposite. Efforts to increase the quality of a device often lead to lower costs in manufacturing and the overall price of the device.
Dave
Not necessarily so. Depends on what the manufacturer does.
At one point in a products life cycle there will be no time to rethink, tinker or re-evaluate or we'd never see a product.
But, after the introduction, sales and shipping pressure is over, one can attend to "better" the device.
Better means value analysis, sometimes driven by consumer feedback, sometimes based on improving profit margin, being able to use better quality parts etc.etc.
For example buying larger size hard drives may be more economic when manufacturers produce the new capacities en masse and abandon the smaller sizes.
Same for chips, LED screens etc.
Some manufacturers decide on cheaper parts which DON'T improve the quality. You can thin plastic parts, metal gauges etc.
As for the original post, as pointless as always.
Nobody can just buy the components and if a product is great and the price is what I am willing to pay, I couldn't care less what parts cost.
We live in information overload times. Why clog up your brain to memorize a stupid analysis like that.
It is not a fantasy if you are a businessman or engineer on a competeing project
The estimates offered up are very valuable, to say otherwise shows a complete lack of business sense. These numbers aren't for the average consummer that graduated from high school with zero business sense
You really believe Apple is in the habit of selling hardware at a loss? Frankly that is a fantasy. It makes about as much sense as the people looking at the cost of 3G and GPS chips and the calling the price for that option a rip off.
The strange thing here is that you don't see people weighing the metal in a car and then caculating it's price based on the cost per pound it is sold at. If they did cars would be a huge rip off. Rational people realize that value added is important and impacts price to the consummer as do many indirect costs.
Dave
The estimates offered up are very valuable, to say otherwise shows a complete lack of business sense. These numbers aren't for the average consummer that graduated from high school with zero business sense
Those aren't even remotely important for these studies.
Again not the least bit important. These are estimates of cost to manufacture that is all. The problem is we have a bunch of democrates on this forum that don't understand what that means.
You really believe Apple is in the habit of selling hardware at a loss? Frankly that is a fantasy. It makes about as much sense as the people looking at the cost of 3G and GPS chips and the calling the price for that option a rip off.
The strange thing here is that you don't see people weighing the metal in a car and then caculating it's price based on the cost per pound it is sold at. If they did cars would be a huge rip off. Rational people realize that value added is important and impacts price to the consummer as do many indirect costs.
Dave
You & me and I suspect many others.
Speaking of iPhones the flip side here is that A4 might be a good choice for the next generation iPhone. Even there though a little more RAM wouldn't hurt. Sadly iPad is nothing more than a bigger iPod Touch. That isn't real bad but Apple should have taken screen size into account when sizing RAM.
Unfortunately iPad represents one of Apples biggest problems which is it's propensity to screw customers with respect to RAM.
Dave
Of course the early adopters don't want to hear that. But I knew something stank when Apple got sneaky about RAM on the spec page. My short term hope is that the 3G will come with more RAM otherwise it will be a long wait for the next rev. It is pretty bad that this device actually has less free RAM than the 3GS.
Speaking of iPhones the flip side here is that A4 might be a good choice for the next generation iPhone. Even there though a little more RAM wouldn't hurt. Sadly iPad is nothing more than a bigger iPod Touch. That isn't real bad but Apple should have taken screen size into account when sizing RAM.
Unfortunately iPad represents one of Apples biggest problems which is it's propensity to screw customers with respect to RAM.
Dave
Why on earth would you think that would improve performance? The iPad doesn't support virtual memory in the first place, so adding RAM won't reduce swapping (it's already at zero), and I doubt there's a filesystem cache in main memory either (flash is fast enough it's probably unnecessary). So how would adding more RAM make anything faster?
I'm sure some of the "profit" money will be used for the - I'm a iPad, I'm a, wait we don't have anything even close" commercials that will come out.
It is pretty easy to see how the $499 model is probably being sold at a loss if you know anything about business.
They make up for it by people upgrading to other models and content sales.
The $499 pricepoint was an objective and important to their overall launch strategy. They had to hit that pricepoint, no matter if they make money or not.
I think you need to learn a little bit more about business before you go spouting off on such things as some kind of authority.
As others have said,you have it backwards.The iTunes store generates just a bit more than break even profits.Tiny profits on music and video,most apps downloaded are free(and thus negative profits),books,30%,but that will never be as big as music or apps.Apple makes it's money off hardware,not content.The iTunes store is there to sell hardware,not the reverse.The proof is that competing devices are close to the same price.
I don't buy this either.
I don't want to bismiss iPad like that as I think there is a lot of good technology in the device and plain old innovation. The problem is the lack of RAM in the device is appaling and Apples approach to the facts here disgusting. I was actually ready for a 3G but I have to rethink that one now.
Dave
In many ways the iPad is very much a cutting edge product. Unfortunately Apple regressed into past patterns in the final product.
I'm very impressed with iPad in all but one respect that is the supplied RAM which is a rip off. This is Apple going back to it's old ways of offering up products with way to little RAM in their base models. Apparently the old ways die hard at Apple, but I think this will come back to bit them in the ass hard this time.
I don't want to bismiss iPad like that as I think there is a lot of good technology in the device and plain old innovation. The problem is the lack of RAM in the device is appaling and Apples approach to the facts here disgusting. I was actually ready for a 3G but I have to rethink that one now.
Dave
R&D and SG&A aren't included in COGS. Apple lists both as line items under operating expenses.
Apple never breaks out numbers for individual products (SKUs) so we'll never know the exact net per item.
You fanboys are all true ********s. Apple R&D = invaluable. Microsoft R&D = worthless.
You really need mental institutions. The good (IMHO) worthless bunch of you. You hypocrite neanderthals get free license to bash Micrsoft but if someone DARE hold Apple accountable to the laws of man, we're called trolls.
You really need to get lives. I'm ashamed to be in this forum w/ you bunch of bozos.
You really need mental institutions. The good (IMHO) worthless bunch of you. You hypocrite neanderthals get free license to bash Micrsoft but if someone DARE hold Apple accountable to the laws of man, we're called trolls.
You really need to get lives. I'm ashamed to be in this forum w/ you bunch of bozos.
Charging a price that most customers are willing to pay is not gouging,no matter the profit.
And you're wrong.Apple has the "RIGHT"to charge whatever they want,just as you have the right to not buy.
Companies sell stuff for a loss all the time. Amazon is selling it's books for a loss to run their competition out of business. People who buy iPhones by lots off applications, music and movies. People who buy an iPad will buy even more.
Think of the companies that sell razors below cost because they know they will make the difference up selling the blades.
Apple needs to make a profit so I don't see what the big deal is...
Nothing if you use P2P.
More RAM could make the iPad faster because it would drain the batteries. Think of it this way, you buy an iPad, the battery runs down fast. You get mad and throw it through the window. With a good arm, you could get the iPad up to 95 MPH. That is far faster than any desktop computer.
I'm curious.Lots of people are calling the amount of ram anything from disappointing to criminal.Has there been any evidence in testing or use so far that it is causing actual real world problems in everyday use?Or is this just spec-obsessed geeks complaining about something normal users will never have a problem with?
It's very hard to define "at a loss".
It's easy to look at fixed, per unit costs. The parts cost x, shipping costs y.
The other costs (R&D, marketing, advertising, air conditioning for Apple stores) are much, much harder. Some are directly connected with a given product - but need to be amortized over units sold over a time period.
If you use a short time period, it looks like "at a loss". For example, let's say that 400,000 Ipads have been sold. Let's take IFixit's numbers, round down a little, and assume $200 profit on the fixed costs.
400,000 * $200 = $80M profit. If R&D and marketing cost $200M - Apple's lost $120M, or $300 per Ipad.
If you sell a million over the first year, and higher end units raise the average profit to $300 = you are close to breaking even. Sell two million, and the bucks are rolling in.
Knowing something about business means knowing how to tweak the numbers to your advantage. Also, note that all of the R&D for the Ipad has already been paid for. This quarter, Apr-May-Jun, the R&D expense for the first generation will be zero.
You really don't know what you are talking about. There is no selling at a loss.
Who here is trying to speak without a grasp of business or Apple. Apple is in business to make money selling hardware. They have succeeded at that where many PC manufactures have not. Part of that success comes from selling hardware at reasonable profits. I really don't think I'm wrong here and I'm pretty sure Apple hasn't changed practices for iPad. If anything the design of iPad indicates a considerable concern for margians.
So I'm sorry if my interpetation of Apples business practices some how offends you. It is not however spouting off from the lack of knowledge nor is my point of view in conflict with other knowledgable people that follow Apple. The $499 iPad is not being sold at a loss!!!!!
Dave
I know enough to call this BS. You simply can't sell your highest volume product at a loss especially if staying in business is the goal.
That really isn't Apples business model. If it was iPods would be ten dollars.
I will agree with the idea that $500 was an objective. Steve pretty much laid out that target years ago when he said they didn't know how to make a $500 computer. However that doesn't mean you design a machine to sell at a loss at that price.
Who here is trying to speak without a grasp of business or Apple. Apple is in business to make money selling hardware. They have succeeded at that where many PC manufactures have not. Part of that success comes from selling hardware at reasonable profits. I really don't think I'm wrong here and I'm pretty sure Apple hasn't changed practices for iPad. If anything the design of iPad indicates a considerable concern for margians.
So I'm sorry if my interpetation of Apples business practices some how offends you. It is not however spouting off from the lack of knowledge nor is my point of view in conflict with other knowledgable people that follow Apple. The $499 iPad is not being sold at a loss!!!!!
Dave
Agreed. The parts pricing doesn't include child labor overseas or freight!
Plus, how can one put a price on "magic" ?
Plus, how can one put a price on "magic" ?
It could be an issue if Apple starts supporting multitasking on the next generation software. if Apple does "Multitasking" the correct way for this platform and just suspends the process to flash, it will not be a problem.