ghost_of_fazz said:
But still, how is it crap to say that those are made for less than $50 each? Even if Apple spends on research, development, or design, let's just admit that even counting those, they have a very large margin of profits. Really, I doubt Apple spends much on their design team nowadays. Or in their factories at China. We all know the pricing of Apple products is based on brand, and aiming for a lower price would go against ther philosophy. It would destroy their reputation, the reputation that drives their sales. Kinda like Nintendo's games: They take A LOT of time to go down in price, because people have the idea that Nintendo's games have lots of value on them. And this goes for every product Apple sells, specially their computers. |
I know I'm really late to the party, but how about some facts?
First of all, the iPhone 5 had an estimated bill of materials of $199 when it came out:
http://www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-$199-BOM-Virtual-Teardown-Reveals.aspx
The cost of many components will have gone down in the past year, but note that the only component which was made deliberately cheaper, the case, cost $33. There's no way that Apple shaved more than $30 off the manufacturing cost by switching case materials. The marginal cost for an iPhone 5C is nowhere near $50, and is likely closer to $150.
It's also worth noting that the iPhone 5 is the most expensive iPhone ever made, costing $11 more to manufacture than an iPhone 4/4S and $20 more than a 3GS. If per-unit margins are the way you want to calculate consumer "value," Apple has up until this point actually been getting less "greedy."
Furthermore, R&D and design are only the tip of the iceburg when it comes to added iPhone costs beyond manufacturing. Also eating into margins are:
- Shipping, distrbution and inventory
- Retail markup
- Software development
- Warranty and customer supoort
- Bundled cloud services
- Licensing and regulatory costs
- Overhead
Even so, it's true that on the iPhone in particular, Apple enjoys gross margins estimated to be around 50%, but a lot of these costs are obscured elsewhere in the company's operations. Company wide, Apple's operating income was $54.6 B on $156 B revenues last fiscal year, or a 35% margin. This doesn't seem out of line with Microsoft's 34% in the last fiscal year, or the 35% margin Google enjoyed in 2010 before Motorola started dragging their performance into the mud. Heck, even Nintendo was pushing 30% margins in the Wii's heyday.
All of the companies above sell integrated hardware, software and service solutions and all have earned upwards of 30% margins on their business. Why does it seem that only Apple's profits are objectionable?
"The worst part about these reviews is they are [subjective]--and their scores often depend on how drunk you got the media at a Street Fighter event." — Mona Hamilton, Capcom Senior VP of Marketing
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