New iPod Family! - Page 24

Fedex just dropped my iPod off. Perfect timing as I was about to leave for work. Impressions later...

Quote:

Originally Posted by Anaxilus 

 

If you think all that w/ shipping and packaging and RnD added together adds more than another $50-75 (probably less) per unit you are wrong.  The majority of the cost is in the bulk purchase of its parts and the miniscule cost of Chinese slave labor.  Believe me, I have a close relationship w/ someone who works at Foxconn.  $600-$700 for an iPhone 4 off contract is ludicrous and a pocket liner.  You think they are losing money on the iTouch and iPods?  They are raking it in hand over fist w/ bigger margins than anybody out there.  Its not hard to guesstimate how much that product sitting on a shelf at Best Buy cost to get there.

I think that a lot of those hardware margins are generated from the flash memory in the device, as we have pointed out Apple offers as much flash memory as anybody in these devices and a lot of how much they profit off a device like this is how well they do in cornering the market on the commodity memory involved during manufacture of the device in the first place. But yeah the real $ is still in the wireless contracts, that is for sure, and that is the reason that we got the lesser screen/camera and no GPS, in the touch IMO. Without a contract, there just isn't enough margin to support it these features.

Quote:

Originally Posted by Anaxilus 

 

If you think all that w/ shipping and packaging and RnD added together adds more than another $50-75 (probably less) per unit you are wrong.  The majority of the cost is in the bulk purchase of its parts and the miniscule cost of Chinese slave labor.  Believe me, I have a close relationship w/ someone who works at Foxconn.  $600-$700 for an iPhone 4 off contract is ludicrous and a pocket liner.  You think they are losing money on the iTouch and iPods?  They are raking it in hand over fist w/ bigger margins than anybody out there.  Its not hard to guesstimate how much that product sitting on a shelf at Best Buy cost to get there. 
 

I don't think they're losing money on itouch and ipods; but i don't think that their profit is 75% of their receipts, as all this "teardowns" tends to claim.

Also, what could your relationship with someone from Foxconn say about apple's costs of shipping, packaging, r&d, marketing, web site support etc?

Quote:

Originally Posted by penartur 

I don't think they're losing money on itouch and ipods; but i don't think that their profit is 75% of their receipts, as all this "teardowns" tends to claim.

Also, what could your relationship with someone from Foxconn say about apple's costs of shipping, packaging, r&d, marketing, web site support etc?

Rather than playing into your red herring lets simplify this for you based on my last argument.  Since you haven't actually made a guess as to how much YOU think it costs Apple to put an iTouch on the shelf at Best Buy how about we start there.    We both know they are not losing money selling the iTouch so consider MSRP and teardown costs, what you have left is profit and extraneous expenses you mentioned.  Then lets extrapolate the difference for an iPhone.  Now show me based on that why you think my guess of $190+$75 for the actual cost of the iPhone would be so wide off the mark. 

Quote:

Originally Posted by Anaxilus 

Rather than playing into your red herring lets simplify this for you based on my last argument.  Since you haven't actually made a guess as to how much YOU think it costs Apple to put an iTouch on the shelf at Best Buy how about we start there.   

What do you mean by "it costs to put an iTouch on the shelf at best buy"?

Apple is a joint stock company, so all the reports are freely available. Wikipedia says that revenue of Apple in 2009 was about $43bln, and that profit in the same year was about $8.2bln, so we could guess (if i didn't mistake all this english accountant terms) that apple's profit for each device is about 20% of the wholesale price.

Again, i don't know what are average retail margins in US, and what is the real retail price of iphone (as it is subsidised), but i'd guess that margins are about 10% (given that manufacturers are selling devices for the same price as independent retailers), and the iphone real retail price is about $600 (given that itouch costs up to $400). So, the approximate numbers are:

1) It costs about $500 for apple to made an iPhone, and about $290 to made an iTouch 64GB (including R&D, marketing, FCC approval etc);

2) Apple sells these to retailers for $630 and $360 respectively, making $130 and $70 of profits respectively;

3) Retailers are selling these to end users for $700 and $400 respectively, making another $70 and $40 of profits.

These numbers are highly approximate, and i didn't take into account that profits for some devices are higher than for another (e.g. looking at the difference in prices of iTouch 8 and iTouch 64, and comparing it to the prices of flash memory, i'd guess that apple makes small or no profits on iTouch 8, but huge profits on iTouch 64).

But it is nowhere close to "apple spends only 20% of the price they get on manufacturing the device", as if it was true, we'd see not 8, but 25bln of profit in 2009.

Quote:

Originally Posted by penartur 

Apple is a joint stock company, so all the reports are freely available. Wikipedia says that revenue of Apple in 2009 was about $43bln, and that profit in the same year was about $8.2bln, so we could guess (if i didn't mistake all this english accountant terms) that apple's profit for each device is about 20% of the wholesale price.

Again, i don't know what are average retail margins in US, and what is the real retail price of iphone (as it is subsidised), but i'd guess that margins are about 10% (given that manufacturers are selling devices for the same price as independent retailers), and the iphone real retail price is about $600 (given that itouch costs up to $400). So, the approximate numbers are:

1) It costs about $500 for apple to made an iPhone, and about $290 to made an iTouch 64GB (including R&D, marketing, FCC approval etc);

2) Apple sells these to retailers for $630 and $360 respectively, making $130 and $70 of profits respectively;

3) Retailers are selling these to end users for $700 and $400 respectively, making another $70 and $40 of profits.

These numbers are highly approximate, and i didn't take into account that profits for some devices are higher than for another (e.g. looking at the difference in prices of iTouch 8 and iTouch 64, and comparing it to the prices of flash memory, i'd guess that apple makes small or no profits on iTouch 8, but huge profits on iTouch 64).

But it is nowhere close to "apple spends only 20% of the price they get on manufacturing the device", as if it was true, we'd see not 8, but 25bln of profit in 2009.

So your guess of $290 for a 64gb iTouch is not far off from my $260 guesstimate of an iTouch.  I don't see how you come to $500 for an iPhone cost per unit.  There is definitely nothing worth almost 80% markup over the iTouch w/ the iPhone.  Solely that the market can bear the price.

http://www.youtube.com/watch?v=3eimrSsuAtk&feature=sub

Could be the camera, but the ipod touch screen looks noticeably less clear at that particularly (non-extreme) angle. Or perhaps it's just cooler than the iphone's screen. 

EDIT: Only 256mb of ram?!

http://gizmodo.com/5633317/ipod-touch-teardown-reveals-only-256-mb-of-ram-and-no-vibrator

Got a bit of use at work today browsing the forums. I didn't have time to sync my library before work, but am doing it now.

Initial impressions of the UI and Safari are good. The touchpad keyboard is much better than expected. Operation is liquid smooth and multitasking is a breeze (even with only 256mb of RAM, apparently). This is my first 'smart' device so I'm still getting the hang of things. No issues so far.

Build quality of course is excellent. weight is distributed properly so it feels substantial in the hand, but also is remarkably unobtrusive in the pocket. This thing is super super thin. I'm waiting for case companies to come around with some options. My friend has an Otterbox for his iPhone 4 and it's pretty nice. I compared the screens of the iTouch and iPhone today side by side and from normal angles, they are identical. I don't have any issues with this lesser quality screen.

Battery life is excellent, I got about 1.5 hours use today and the battery indicator (when it's like full screen size) had barely moved.

I'll post my sonic impressions later after my library is synced and I can compare with my Zune 8.

My only problem thus far is iTunes 10. Any time I use this program to deal with adding library folders or syncing large amounts of music, the program just grinds to a halt, Windows 95 style with the slide show type button presses and delayed reactions. Glad I only need to use it for syncing. Certainly won't be using it for anything else.

Quote:

Originally Posted by Anaxilus 

Oh I guarantee you that is a substantial markup.  There isn't even $400 worth of anything in there.  

 

http://news.cnet.com/8301-31021_3-20009027-260.html

 

I'll go w/ sky high profits for my hypothesis.

Quote:

Originally Posted by Maxvla 

You think Apple has significantly more mark up on the iPhone 4 than the iPod Touch? The iPhone actually has competition, while the iPod Touch has practically none. Talk about backwards...

There was a very notable source that I read that said the iPhone only costs.... 172 or 182 (can't remember) to make, most of it coming from the Retina display. It isn't even over 200. You're paying some serious Apple Tax brother. 
 

Quote:

Originally Posted by grokit 

 

I think that a lot of those hardware margins are generated from the flash memory in the device, as we have pointed out Apple offers as much flash memory as anybody in these devices and a lot of how much they profit off a device like this is how well they do in cornering the market on the commodity memory involved during manufacture of the device in the first place. But yeah the real $ is still in the wireless contracts, that is for sure, and that is the reason that we got the lesser screen/camera and no GPS, in the touch IMO. Without a contract, there just isn't enough margin to support it these features.

The retina display is the most expensive part in the iPhone 4.Same with the Touch since it has the same display now. Straight from manufacturers it was going out at... around 80 bucks for the screen? This was a while ago and I don't rememeber the numbers so don't make a case out of this, but the total price of an iPhone 4 is under 200 cost to apple. 

Quote:

Originally Posted by Young Spade 

 

There was a very notable source that I read that said the iPhone only costs.... 172 or 182 (can't remember) to make, most of it coming from the Retina display. It isn't even over 200. You're paying some serious Apple Tax brother. 
 

That wasn't my point. I was talking about the % markup between the iPhone and iPod Touch.

Also, on topic of the quote, remember that a product like an iPod Touch or iPhone is more than it's parts.

Just ordered my ipod classic since nothing new was on the horizon. No interest in the other models. Storage is king!

Quote:

Originally Posted by Maxvla 

That wasn't my point. I was talking about the % markup between the iPhone and iPod Touch.

 

Also, on topic of the quote, remember that a product like an iPod Touch or iPhone is more than it's parts.

Oh I know, I wasn't trying to make a point here, just throwing some stats around to aid in the conversation. 

Quote:

Originally Posted by serpico 

Just ordered my ipod classic since nothing new was on the horizon. No interest in the other models. Storage is king!

+1

I will stick to my Classic + LOD + iBasso till solid state memory surpasses the current Classic 160 gb mark. To me it's all about the music. The more available the better (and less time spent on syncing)