 
Anonymous
Premium
join:2004-06-01
IA | Fanboy tax? LOL I like that! | |
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jazzy_
join:2004-01-27
Charleston, SC | Re: Fanboy tax? lol yeah that got a laugh out of me  | |
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AppleLovFest
@verizon.net | It's amazing how anything that Apple does it the greatest thing since sliced bread even though they are using lube on you. Apple makes money because idiots buy ANYTHING they make. No other reason. Their stuff isn't that good anymore. | |
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c0de
join:2004-10-14
Richmond, VA | Re: Fanboy tax? Fanboy Tax == Funny!
But I really don't like being called an idiot just because I buy Apple products. Some of the stuff they make, is really quite nice, espically when you get it on sale/clearance for 30% off. | |
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bbenso1
join:2004-11-28
Baltimore, MD
| Insufficient Data Umm, isn't a Bill of Materials alone insufficient data to figure out how much each iPhone costs? Firstly, I'll bet that Bill of Materials doesn't include labor cost. Even if they're mass produced on an assembly line I guarantee there's some payroll cost in there somewhere. Plus it probably doesn't include the cost of the packaging, included manuals, software, etc.; Mastering/duplication of any included software/driver disks; cost of shipping the units to retail outlets, etc., etc. | |
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Dr Demento
I Vant Blud
join:2002-01-02
Denville, NJ
| Re: Insufficient Data As well as making up for R&D costs, in which "licensing fees" might be the more appropriate term for it and the fact they sat on those as well as patents for song long before actually producing the product. Not to mention marketing and the what they had to pay their Chinese mass producer.
In other words, like others stated, there is more that goes into mass producing and selling a product than just materials. | |
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| gust334
join:2002-05-09
Gilbert, AZ
 ·Comcast
 ·AT&T Midwest
| My employer uses several firms for tear-downs of competing products. The top firms that do tear-downs are pretty darn good at what they do. I wouldn't expect they would be far off.
If you read the link, you'll see that the tear-down firm in question did factor manufacturing costs into their detailed estimate. That firm also cautions that they haven't had a physical unit in their lab yet. | |
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BuriedCaesar
It's Not Polite To Stare.
join:2004-03-27
Richardson, TX
 ·AT&T U-Verse
·AT&T Yahoo
| Re: Insufficient Data Yeah - so this means that ALL of the details are suspect and not worth noting and purely speculative and based on hearsay and well, not worth spit at this point.
Kinda like trying to read a book without picking it up and opening the cover and then trying to "guess" how it will end based on the cover title...
"Yup - it's got words - and lots of 'em, but not enough to justify the cost. However, we haven't read it yet, so this is just an estimate."
Bogus.
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That was preposterous! Utter Nonsense! Totally unsupportable drivel! You can't be serious!....Um, what did you say? | |
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join:2002-05-09
Gilbert, AZ
·Comcast
·AT&T Midwest
| Re: Insufficient Data said by BuriedCaesar  :Yeah - so this means that ALL of the details are suspect and not worth noting and purely speculative and based on hearsay and well, not worth spit at this point. Sorry, I think you're unclear on the concept. No reputable tear-down firm would risk their reputation on making up random internals.
There are lots of avenues for such firms to find out what is inside a device, even one not yet offered for general sale. A great example of a legal one are the public disclosures including internal photos required (?) by the FCC for type approval before a device can be sold or imported in the USA.
Within about two minutes of random clicking on the FCC site, I found photos of the inside of several phones that clearly show individual components (you can almost read the device values). The photos show various stages of assembly/disassembly, front and back, including the PCBs with the RF shields removed.
For a particular Sharp brand phone, they were in convenient PDF form, no less.
Presuming Apple has applied for FCC type approval (not an unreasonable presumption?) then it seems plausible that someone saavy to the FCC type approval process could probably find pictures of the disassembled phone.
Then there's the whole area of industrial spies, etc. Not going to go there.
Without having an exemplar in hand, it is hard to judge things that cannot be easily detected from the picture... for example, how machined a piece of metal is, how many forming operations were required, how many layers in a thin-film connector, etc. Those are good reasons for such a disclaimer by the tear-down firm.
said by BuriedCaesar :Bogus. Not.  | |
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BuriedCaesar
It's Not Polite To Stare.
join:2004-03-27
Richardson, TX
·AT&T U-Verse
·AT&T Yahoo
| Re: Insufficient Data Thanks for the explanation, and I'll retract my "bogus" statement. However, until that "someone" can say they actually tore apart a working model rather than work from photos or making educated guesses as to what's inside, I'll choose to remain highly skeptical of any claims made as to estimated cost of manufacture.
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That was preposterous! Utter Nonsense! Totally unsupportable drivel! You can't be serious!....Um, what did you say? | |
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BuriedCaesar
It's Not Polite To Stare.
join:2004-03-27
Richardson, TX
·AT&T U-Verse
·AT&T Yahoo
| I know this thread is pretty stale, but just couldn't pass this up... anyone care to take a look?
»www.informationweek.com/news/sho···97001269
Looks to me like things are starting to become more clear, and the original "estimate" might just, in some small way, be, oh, a teensy bit inaccurate, and of course, they can always conveniently fall back on their "disclaimers".
If this is borne out, then I guess I can choose to chalk this report up to the good ol' reliable FUD machine and a desire by an outfit to generate a website hit burst and try to cash in on the early buzz.
(Sometimes getting the scoop mean you might get a scoop of something you didn't intend to pick up, and it turns out to really stink once you get closer to it...)
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That was preposterous! Utter Nonsense! Totally unsupportable drivel! You can't be serious!....Um, what did you say? | |
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Shark_615
join:2006-01-17
Pickering, ON | cool How much of that goes to Cisco? | |
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av8ndv8
Premium
join:2003-05-19
Albuquerque, NM | Not so bad.... These people obviously haven't a clue about manufacturing. A product that sells for only twice what it costs to produce is rare. Once you factor in distributing, sales, overhead and taxes, it's a bargain. But no, I still don't want one. | |
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GOLFnSUN
Enjoy the sun
Premium
join:2002-03-03
Avalon, NJ
 ·Sprint Mobile Broa..
·Comcast
| Re: Not so bad.... said by av8ndv8 :These people obviously haven't a clue about manufacturing. A product that sells for only twice what it costs to produce is rare. Once you factor in distributing, sales, overhead and taxes, it's a bargain. But no, I still don't want one. They are ignoring all those costs in attempt to portray Apple as some greedy crooks. They must know there are other costs, so that estimate is just meant to inflame their socialist readers.
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My BLOG
My Web Page | |
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Grail Knight
Who Dares Wins
Premium
join:2003-05-31 | Re: Not so bad.... quote:
so that estimate is just meant to inflame their socialist readers
Seems to be working. | |
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Rural land of the rising sun
join:2006-04-19
japan
4 edits | Re: Not so bad.... D'OH!!! wrong reply!!!  | |
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Grail Knight
Who Dares Wins
Premium
join:2003-05-31 | Re: Not so bad.... You are quoting a statement I did not make.
Reply to thc so he sees your post. | |
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| | Asmodeus
join:2004-05-26
Spring Valley, CA
| said by GOLFnSUN :said by av8ndv8 :These people obviously haven't a clue about manufacturing. A product that sells for only twice what it costs to produce is rare. Once you factor in distributing, sales, overhead and taxes, it's a bargain. But no, I still don't want one. They are ignoring all those costs in attempt to portray Apple as some greedy crooks. They must know there are other costs, so that estimate is just meant to inflame their socialist readers. socialists who associate themselves with the iLife way of life are deluding themselves about what they are or who they should be... be that as it may, what is neglected outside the BOM itself is the cost of marketing, advertising, trade pacts with other vendors, distribution, waste and overhead... | |
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Jack Bauer8
Andrew
Premium
join:2003-10-19
Tampa, FL
1 edit | said by GOLFnSUN :said by av8ndv8 :These people obviously haven't a clue about manufacturing. A product that sells for only twice what it costs to produce is rare. Once you factor in distributing, sales, overhead and taxes, it's a bargain. But no, I still don't want one. They are ignoring all those costs in attempt to portray Apple as some greedy crooks. They must know there are other costs, so that estimate is just meant to inflame their socialist readers. Apple is greedy. There was an episode on south park where everyone got hybrids. To stop global warming and such.
Instead they had to much smug and what im getting at is apple has the same effects on its fanboys.
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“Life is short, don't waste time worrying about what people think of you Hold on to the ones that care, in the end they will be the only ones there." | |
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| | Warez_Zealot
Rural land of the rising sun
join:2006-04-19
japan
1 edit | said by thc6 : so that estimate is just meant to inflame their socialist readers That sounds like an oxymoron. If you replaced "iPhone" w/ "prescription costs", "Medical costs" or "educational funding", then I could see your point.. 
Anyways, the only reason I think this article COULD be true is because Apple is selling the phone for $500 - $600 on a 2yr Cingular contract. No one ever does that. Usually you will be treated w/ a "cheaper" phone price when you go on contract.
There are 2 reasons I think Apple and Cingular think they can sell the phone at 2x cost and on contract:
1) It's exclusive to Cingular
2) Apple thinks any Apple product w/ an "i" in front of it will mean automatic purchases from the masses of "hip" iPod owners.
I personally think Steve Jobs had to call that thing an iPhone when he introduced it, cause if it was called something else, it wouldn't have that brand recognition.
From reading reviews and posts here, Steve Jobs seems to have made the correct deduction. I think there is a saying: "if they are willing to pay it then sell it to them"...
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The meek shall inherit the earth but don't forget the poor are the ones who inherit the debt. | |
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scrummie02
Bentley
join:2004-04-16
Arlington, VA
| one must remember any sort of profit is bad...
It is unacceptable to make money from your innovation. It's supposed to be given away for free much like music and movies...
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"I hate conservatives, but I really hate liberals." - Matt Stone
»www.reason.com/ | |
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RadioDoc
58ef2c0
Premium,ExMod 2000-03
join:2000-05-11
·AT&T Midwest
| So what? Any sane manufacturer sells the product for a multiple of the materials cost. 100% markup over materials cost is not that bad for a non-commodity item, actually.
From that you've got to pay general overhead, marketing costs, tech support costs, return costs, and a lot of other nickel-and-dime expenses.
iSuppli needs to go back to iBusiness iSchool.
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Toolmaster of La Grange.
Save the Pacific Northwest Tree Octopus! | |
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hayabusa3303
Over 200 mph
Premium
join:2005-06-29
clubs: | forget something. everyone forgets about R&D of the products.
This is nothing but a BoM. Factor in other things and i bet the profit is more like 30% when done. | |
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cobo6
join:2002-02-18
Willingboro, NJ | iphone they are making their money back....I don't see a lost if the unit does well, but the person above me, what about cisco...then i see a little lost | |
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GilbertMark
Premium
join:2001-05-02
Gilbert, AZ | Hmmm Fanboy tax, huh? How much does it cost to make Windows?
$1 per copy including the box? | |
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kyramilan
join:2006-11-26
Pensacola, FL
| Re: Hmmm said by GilbertMark :Fanboy tax, huh? How much does it cost to make Windows? $1 per copy including the box? Actually, Vista has cost Microsoft $5 billion to design according to Microsoft. Some estimate up to $7.5 billion.
My laptop disks with XP are DVD-ROMs not CDs.
I guess you think Superman Returns only cost $2 including the box to make.
Superman Returns Costs (BoxOfficeMojo.com)
Movie = $260+ million ($40m blown on false starts)
Marketing = $100 million
Total with DVDs = $400 million
It is still about $75-100 million in the whole for WB. | |
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GilbertMark
Premium
join:2001-05-02
Gilbert, AZ
·Cox HSI
| Re: Hmmm said by kyramilan :said by GilbertMark :Fanboy tax, huh? How much does it cost to make Windows? $1 per copy including the box? Actually, Vista has cost Microsoft $5 billion to design according to Microsoft. Some estimate up to $7.5 billion. My laptop disks with XP are DVD-ROMs not CDs. I guess you think Superman Returns only cost $2 including the box to make. Superman Returns Costs (BoxOfficeMojo.com) Movie = $260+ million ($40m blown on false starts) Marketing = $100 million Total with DVDs = $400 million It is still about $75-100 million in the whole for WB. "According to Microsoft" well they can say anything they want right?
NEXT.
"I guess you think Superman Returns only cost $2 including the box to make. "
After time yes. :uhhhhhhhhhh:"
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Got a V3 or a V3i or an L7? Want to get the most out of them? Check out my sites »hacktheV3.com and »hacktheV3i.com and »hacktheL7.com
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kyramilan
join:2006-11-26
Pensacola, FL | Re: Hmmm No, I'm pretty sure Microsoft spent $5 billion to make that piece of s*** OS called Vista. And, I'm sure they'll spend a few hundred million more convincing people (who don't know any better) it isn't a piece of s***! | |
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Derspankster
Premium
join:2003-02-12
Marion, OH
·RoadRunner Cable
·RoadRunner Cable
| Re: Hmmm said by kyramilan :No, I'm pretty sure Microsoft spent $5 billion to make that piece of s*** OS called Vista. And, I'm sure they'll spend a few hundred million more convincing people (who don't know any better) it isn't a piece of s***! Obhviously, YOU do know better, right?
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I thought I made a mistake once but I was wrong | |
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RideRed
Vista needs a popup blocker for Vista
Premium
join:2005-06-18
USA | They should get their money back...Vista sucks ass. | |
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Skilos
join:2000-08-19
Astoria, NY | Re: Hmmm It may suck ass in your opinion, but the whole world will be using it. more than i can say for apples OSux with its amazing 2% market share. | |
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RideRed
Vista needs a popup blocker for Vista
Premium
join:2005-06-18
USA | Re: Hmmm Market share doesn't mean anything...look at AOL. Enjoy your BSOD. | |
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Grail Knight
Who Dares Wins
Premium
join:2003-05-31
·Verizon Online DSL
| Very preliminary It will take at least a good 6 months to a year to determine all the aspects of production IMO.
If demand is high costs to produce should decrease due to bulk parts purchases.
Depending on which country(ies) are producing the phone hourly wages could vary drastically.
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When the going gets tough the tough run away.
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axus
join:2001-06-18
Washington, DC
·Verizon Online DSL
| yeah thats kind of negligent to leave everything else out Research costs alone amount to a lot. That's why we have patents, though really they only need a few years of patent protection to make their money back (or not). Clones would still have to pay for marketing, customer support, etc.
Putting it all together in a quality manner has got to cost something. All the costs on top of that must be a lot.
It's still overpriced, but saying they are making 49.3% profit is stupid. Compare to Dell, where you can buy a PC for $499 that is more costly from a manufacturing, support, and infrastructure point of view. And I bet Apple won't sell as many iPhones as Dell does computers, thus the higher cost. | |
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ninjatutle
Premium
join:2006-01-02
San Ramon, CA | Fancy boxes account for the rest of the cost. Those origami like boxes within boxes must be labor intensive. | |
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Pictor Guy
join:2004-06-21
Sammamish, WA
| Wow! What insight! I wonder how much it costs MSFT to produce a Vista Retail package? That is, the cost of the CD/DVD, box, cardboard liner, shrink wrap and that nifty little prism sticker. I wonder what the fan boy tax is on that one?  | |
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ninjatutle
Premium
join:2006-01-02
San Ramon, CA | Re: Wow! What insight! And Vista has to do with the iPhone how? | |
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| | Pictor Guy
join:2004-06-21
Sammamish, WA
| Re: Wow! What insight! said by ninjatutle :And Vista has to do with the iPhone how? We're talking price of a retail product that also has associated IP and R&D costs. Vista is a retail product with associated IP and R&D costs. | |
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RocketChild
join:2003-11-24
Round Rock, TX
| Opening Profit Margins. People don't seem to remember that Apple was only make something like $13 dollars profit on the early iPods. Back in their first few years, Apple was almost loosing money at the price point they were selling them at.
Funny how times change. I am sure there is more to the story. | |
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kyramilan
join:2006-11-26
Pensacola, FL
| Re: Opening Profit Margins. Most iPods are about 25% profit now.
XBOX is still selling as a loss leader.
God only knows how much PS3 is costing Sony (a loss of $250 a piece?).
Funny, the WII is profitable.
And, I'm sure the PS2 has made Sony a ton of money.
As far as the iPhone, other than being a piece of crap, the "Fanboy" tax is ridiculous. My cellphone was $499 but I paid $159 for it. To replace, it is about $399 (1 1/2 years later).
Yes, the iPhone is a rip-off. | |
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| | vinnie97
join:2003-12-05
Mesquite, TX
| Re: Opening Profit Margins. said by kyramilan :XBOX is still selling as a loss leader. I've heard otherwise. In the past several months, they're starting to make an (albeit small) profit. | |
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ablack6596
join:2005-01-28
Scarsdale, NY | Re: Opening Profit Margins. Yes, but the console makers also make money off anything that makes your console useful. Games, accesories. They sell at a loss to make money in the long run. | |
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| | | | vinnie97
join:2003-12-05
Mesquite, TX | Re: Opening Profit Margins. quote:
They sell at a loss to make money in the long run.
True enough, unless you're talking about Nintendo. | |
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GilbertMark
Premium
join:2001-05-02
Gilbert, AZ
·Cox HSI
| Hmm. And how much profit is MS making on Windows right now per box?
Surely, they have paid off their bug laden R&D and marketing costs by now?
They have what, 95% market share?
Hmm.
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Got a V3 or a V3i or an L7? Want to get the most out of them? Check out my sites »hacktheV3.com and »hacktheV3i.com and »hacktheL7.com
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warriors
It's A Great Time Out
join:2001-06-05
Alviso, CA
| what's the "true cost"? The true cost really depends on the chosen accounting method. Do you count advertising? Do you count administration? Do you count facility? There is no way to estimate the "true cost."
Since I'm not the IRS, I'll take the BoM's estimate. 46.9% margin is awesome! Apple stocks buy buy buy! | |
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RideRed
Vista needs a popup blocker for Vista
Premium
join:2005-06-18
USA | Uh...Apple doesn't make that profit; it's split with retail They don't sell them at MSRP, they sell them at wholesale to retailers who would likely charge less than MSRP.
But hell, let the Apple bashing commence | |
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texans20
Weapons of Masturbation
Premium
join:2002-09-28
Texas!
clubs:
| Who Cares The iPhone will fall the way of the PS3. Far too expensive, and not that great. If you are an apple fanboy, and you support everything Apple does, and you want an iPhone, great! Get one. The profit margin is not that big of a deal. I have purchased bottled water before, I'm sure the $1 I spent on the bottle was far more than a 100% markup.
Fact of the matter is Apple has a right to a profit. If they wanted to sell the iPhone for $2000, it's their right. I personally wouldn't buy it for $499, hell I wouldn't buy it for anything over $150. | |
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JAAulde
yum yum yum yum yum
Premium,MVM
join:2001-05-09
Hagerstown, MD
| Pesky facts quote:
Yes, obviously this does not include the cost of development, marketing, gnome labor, Steve Jobs's salary, tectonic plate recalibration, and/or the expensive and time consuming process of "integrating cool".
Way to cast off those factual additions to the cost of producing and selling an extremely complex technological device to a national market.
What's wrong, Karl Bode , facts getting in the way of your journalism again?
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No eat apple, eat cookie. Apple spoil dinner. | |
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batterup
I Can Not Tell A Lie.
Premium
join:2003-02-06
Netcong, NJ
clubs: | Not again with wholesale price. Apple can't sell the phones at MSR, that is what the store sells it for. | |
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atuarre
Here come the drums
Premium
join:2004-02-14
Lake Charles, LA
clubs: | RE Bear in mind that cell phone companies do not make their money off of the phones they cell, but rather the wireless plans they put customers on, however, since apple only manufactures the phone, they are making a profit off of this product. | |
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iPhone Costs $245.83 to Make
