HardOCP News
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If you bought an iPad earlier this week, you should probably avoid reading this article unless you want a bad case of buyer’s remorse. Everyone else...feel free to laugh.
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iPad Components Cost $259
- Thread starter HardOCP News
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I don't know them personally but I know of 3 people who are returning their iPad already.
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oh no, you mean when you buy something in the store it costs more than the cost of the materials used to build it??
Yeah, profits, making money, running a business, who-woulda-thought!?
Yeah, I'm actually a little surprised a $259. I would've expected it to cost under $200. Apple always seems to price their electronics about double what they cost in supplies.
Smiththers2
Limp Gawd
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oh and im sure my $23,000 Subaru didnt cost 23 grand to make and sell it....
Give it time. The same parts will slowly get cheaper and cheaper.
Parmenides
Supreme [H]ardness
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Aww, this makes more sense. I actually was a little surprised that the iPad was as cheap as it is.
Parmenides
Supreme [H]ardness
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relatively speaking of course.
freakyhair
Limp Gawd
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That actually is not very out of whack, especially for a new product. Many times, the labor and overhead involved in assembling a new product is nearly as much as the parts. Besides, who paid for the engineering? That needs to be taken care of.
You think that is bad? imagine that the car charger you might pay $20 for has about $3 worth of parts in it, including enclosure!
I dislike most things apple, but you need to hand it to them for the innovation.
You think that is bad? imagine that the car charger you might pay $20 for has about $3 worth of parts in it, including enclosure!
I dislike most things apple, but you need to hand it to them for the innovation.
That's just about in line with most similar goods, and actually a bit higher than I was expecting. Apple was never one to take a loss on any hardware in an effort to spur sales, hoping for a return later on as costs drop. The XBOX360 and PS3 sold for quite a bit less than the hardware costs at the outset, with profits being found in the software sales. Apple has always charged a sizable premium for their hardware, and that will never change.
That's a crazy low price! Now, if only some enterprising company could figure out a way to buy them, and put them in a sleek package, and integrate them into a marketplace with 150,000 applications and 10 million songs for me to buy, and give me a warranty that replaces the whole deal for no fee if it breaks while removing all of the hassle on my end and giving me a product that just works... why, I'd be willing to pay at least $499 for that!
Tell that to the Playstation 3?
Ipad Engineering:
Hay guyz, lets make the iPod Touch bigger! Yay, that took 5 minutes. Happy Hour, let's drink!
As jobs showed/explained repeatedly, they don't follow the business methodology of PC manufacturers. They don't invest in technology and recoup the development cost later, all their expenses are done free and clear. The very first item they sell is already a profit.
Development isn't even that high considering that their hardware is just based on existing technology.
However, from what the article said, the proprietary nature of the components actually made the ipad more expensive than it had to be. A netbooks touchscreen for example can be cheaper than an ipad touchscreen if it was using a factory standard spec.
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I thought laptops were also pretty much sold at cost (by the stores anyway) and they make up the rest of the money by selling accessories and software.
But we all know Apple is "special"...
haha, people have no idea.
Back about 13years ago I ran a pet store, you know the little light bulbs for aquariums.
The sold for $1.99 each, we paid $10.00 for a case of 100.
The only other thing I recall being a huge mark up was the dogs we sold, I think they cost any were from $25-$100.00 each and we sold them for $400-$1200.00 each.
This was not my store, I was just the manager, I had nothing to do with prices.
Back about 13years ago I ran a pet store, you know the little light bulbs for aquariums.
The sold for $1.99 each, we paid $10.00 for a case of 100.
The only other thing I recall being a huge mark up was the dogs we sold, I think they cost any were from $25-$100.00 each and we sold them for $400-$1200.00 each.
This was not my store, I was just the manager, I had nothing to do with prices.
Laptop OEMs just prefer to pump out stuff in sheer volume in an epic quest to make 0.000000001 % profit.
[quoteBut we all know Apple is "special"...
[/QUOTE]They're sitting on ~$40 billion in cash, so they must be doing something right.
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I think it's more like the Apple zealots are doing something wrong...
But hey, why not make money hand over fist by gouging your fanatical consumer base?
freakyhair
Limp Gawd
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I know jobs has said that repeatedly, but that is BS. If you spend $$$ to engineer a product, and the project flops, you have lost money. Just because they have enough money to pay the engineering upfront, doesn't mean they can't lose money on developing a project.
And yes, I know they easily paid their engineering off the first weekend this thing sold.
I don't think that's the case, either. OEMs (by doing the what I mentioned) have really shifted people's idea about how much a system should cost, and what they should expect from it. Most (judging by the forum's general outlook) perceive an $1100 Apple laptop as being 'overpriced' and any features delivered above and beyond what PC OEMs deliver as 'useless.' This includes build quality, better battery life, superior trackpads, keyboards, support, etc.
RadCliffeX
2[H]4U
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I dont really care if they make obscene profits. As long as people are voluntarily buying their product, and they arent breaking any laws, more power to them.
What I find ironic is that many of the people who LOVE apple products, and never question the price, are the same people who constantly complain about other companys obscene profits. Apple can have 40-50% margins, yet oil and health care companies with 5% (or less) margins are evil and greedy ..
What I find ironic is that many of the people who LOVE apple products, and never question the price, are the same people who constantly complain about other companys obscene profits. Apple can have 40-50% margins, yet oil and health care companies with 5% (or less) margins are evil and greedy ..
You mean apple zealots are doing something right. If they are doing something wrong, they wouldn't be an apple zealot.
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So, those people who say "I don't care what Apple puts out, I'll buy it anyway without seeing it first" are doing something right? Even if the product is complete shit?
Anyone buying like that is obviously foolish. But I have to ask a couple questions, a) how many people that have bought an Apple product actually purchased like that? and b) which Apple product is 'complete shit?'
Being a retailer and knowing my cost on items and what MSRP is and wht I charge it doesn't sound to far off.
The reason the mark up is so high is to cover overhead. The product is cheap. The labor to get the product from start to sold is what is expensive. Apple stores in the mall aren't cheap places to lease and maintain, paying salaries for the store employees, plus corporate employees, plus company infrastructure all costs money. There may be a ~50% margin on the cost of the item versus what it's sold for, but a lot of that margin is gets gobbled up in other costs.
Something that I can order at $25 I would sell for $50-$60 to cover my initial cost, plus over head, plus a percentage to replace the item I sold.
The reason the mark up is so high is to cover overhead. The product is cheap. The labor to get the product from start to sold is what is expensive. Apple stores in the mall aren't cheap places to lease and maintain, paying salaries for the store employees, plus corporate employees, plus company infrastructure all costs money. There may be a ~50% margin on the cost of the item versus what it's sold for, but a lot of that margin is gets gobbled up in other costs.
Something that I can order at $25 I would sell for $50-$60 to cover my initial cost, plus over head, plus a percentage to replace the item I sold.
I'm not an Apple fan, but if someone sees a perceived value in something then who is the product complete shit?
I'll be honest. I'd like to have something bigger than my phone, but smaller than a laptop for when I'm sitting on the toilet trying to take a huge after dinner dump.
IAWTP.
My #1 reason for wanting a tablet computer. My netbook is a little too cumbersome for it.
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a) Probably more than would like to admit...
b) I guess I meant in terms of a price/performance ratio. In that sense, I'd say the iPad is definitely that. Perhaps even some of their desktop offerings, as well.
How much of a nokia phone sold is the Symbian OS? Or an android? Or the windows CE?
Note that the $200 price tag only applies to locked AT&T phones, everyone else is paying $1000.00 for a 3GS. An unlocked nokia 5800 costs $280.00. Is the OS worth an additional $700.00?
Seriously? Not even an intelligent comparison.
The consoles often sell for less than they are worth and even at a loss since the driving money makers are the games and accessories....which are useless without a console. See how that works? Different business model. Don't even mention the App Store or whatever. The 360 sold at a loss for a substantial amount of time as well I believe.
I'm not saying that the iPhone OS covers up all the remaining cost. I'm just saying it wasn't even mentioned in the components that cost money breakdown.
Ppl should start getting used to that software isn't free, just because it can be copied easily (unlike its physical counterparts).