iSuppli Revises Entry-Level iPad Component Cost Estimate Up to $260

[firewood]

Do we know where they get the prices for all the parts?

The prices aren't what was reported. It was the cost that was estimated. Once you teardown, open up, slice and photograph the chips, you will have a very good estimate of how much each piece of silicon of a certain size and technology cost to fabricate, package and test. How each chip is then priced in the COG is an accounting game after a game of high level negotiation between Apple and each vendor, possibly for multi-component multi-year deals. Whatever profit Apple isn't making on some component, some vendor is in exchange. But my guess is that Apple is very very good at vendor price negotiations. They do not pay list prices, so those aren't very relevant.

Also, R&D (look up "sunk costs") and overhead are different line items, not part of marginal COG sold.

 

[firewood]

Basically you are saying normal users should take whatever Apple shoves down their collective throats and keep quite. Sad, very sad.

Apple can't do any shoving. It isn't the old Soviet government that can send black marketeers to the Gulag. Consumers in the U.S. are free to take their money to Amazon/Toshiba/Acer/HP/Fusion Garage/etc. If any consumer thinks that those companies will provide them with a better product, in their opinion, for the price, they will. Some will. Several 100K didn't.

 

[srauber]

Really free ... a lot of peolple don´t know what it is
This is not only the case with Apple.
There are psycological issues that let people think that they really need something. So if you can have a hype a lot of people are getting high to join the party.

 

[zevucsd]

Feather pic

Anyone know where that pic apple is using is from?

 

[jragosta]

Also, R&D (look up "sunk costs") and overhead are different line items, not part of marginal COG sold.

Not completely true.

It is quite common to include SOME overhead costs in COGS. Typically, the overheads directly tied to manufacturing a product (shipping, utilities, plant depreciation, etc) are included in COGS.

Some costs can be allocated either to overhead or COGS. For example, warranty costs or commissions. In my business commissions are included in COGS, but not warranty costs. I've been with other businesses who did the opposite.

 

[gerlitzappel]

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.

thanks for clarifying, my dyslexia was acting up again