How much do IRiver pay for the licensing to make a lightning compatible product? I would imagine A LOT!
From my old days in HIFI retail 10x the material cost = retail cost, was the understood rate,
and that only allowed for a 30-40% margin at retail.
So factor in the Cost of Sale Labour and Overheads and you can guess what the manufacturers make.
HIFI Shops have a lower margin that almost every other high street industry, it's amazing that any of them survive.
Now we mainly buy from Web Sites, HIFI should be cheaper than ever!
My original estimate for the cost of the unit included the Apple components. Apple does not charge money to join MFi program, but rather collects royalties per item sold. The costs stands for less than 2% of the unit cost at the retail side. So its not as much as you are thinking.
What retailers discount their products to has little effect on the per unit profits at the wholesale level. Retailers can cut each others throats on pricing all they want, but iRiver still makes the same amount. This is not to say that retailers discounting products has zero effect on a brand, but thats not what we are talking about here.
Wholesale prices will always remain constant, and it is the retailer that decides the final sale price of the unit based on what the market can take. Thats my guess to why you can find these discounted to the 7K NTD level in Taiwan.
I just tried my iPhone cable with the AK10; unfortunately it does not work.