iSuppli Corporation has conducted its usual dissection of the latest product from Apple, concluding this time that the 3rd generation nano is more of a revolution than an evolution of the previous model. The majority of the components in the new compact music player are simply nonexistent in the old nano, and new suppliers have been brought to the table. “The changes in components have resulted in significant cost reductions in the nano design, allowing Apple to offer a product that is less expensive to build and that has enhanced features compared to its predecessor,” said Andrew Rassweiler, senior analyst and teardown services manager for iSuppli.
iSuppli’s Teardown Analysis team determined that the Bill of Materials (BOM) comes to $58.85 for the 4GB version (retail price of $149) and $82.85 for the 8GB version (retail price of $199). In other words, Apple is selling the devices for more than double their hardware worth, which is exceptional even by Apple’s standards. The BOM of the new 4GB nano is 18.5% lower than the $72.24 direct materials cost of the previous version of the nano released in late 2006. The new product has the lowest BOM of any member of the nano line analyzed by iSuppli. However, these values are estimates and do not include costs for manufacturing, software, intellectual property, accessories, packaging or research and development costs.
News source: iSuppli
iSuppli’s Teardown Analysis team determined that the Bill of Materials (BOM) comes to $58.85 for the 4GB version (retail price of $149) and $82.85 for the 8GB version (retail price of $199). In other words, Apple is selling the devices for more than double their hardware worth, which is exceptional even by Apple’s standards. The BOM of the new 4GB nano is 18.5% lower than the $72.24 direct materials cost of the previous version of the nano released in late 2006. The new product has the lowest BOM of any member of the nano line analyzed by iSuppli. However, these values are estimates and do not include costs for manufacturing, software, intellectual property, accessories, packaging or research and development costs.
News source: iSuppli
Very nice and despite the markup, I think pretty well priced!
Very nice and despite the markup, I think pretty well priced!
you have to be kidding me, you can justify them charging double what they make to manufacture it??? how??, if sony did this the ps3 would be even more ridiculously overpriced.
they made more than their money back there on the first how ever many generations of ipods, i am guessing most of the R&D costs you mention have definately been made back already
they made more than their money back there on the first how ever many generations of ipods, i am guessing most of the R&D costs you mention have definately been made back already
So R&D costs vanished after the first iPod was released. Riiiiigggggghhhhhhtttt........ seriously, get a clue. Truth be told, any manufacturer is going to set their sell price on what the market can bare and not solely on the bill of materials for the product.
Although it is very interesting to know about what the cost of one of these costs Apple, it shouldn't lead to the conclusion that Apple is overpricing their products. Everyone already knows that Apple overprices their products, along with most other manufactures.
If they've made all the money they can stand from the first few generations of iPods, why doesn't everyone at Apple just go home and retire early.
just look at the console industry.
a 200% profit in IT is just ripping people off
ok what about the rest of the computer hardware market.
the consumer electronics market
the tech industry as a whole, except maybe the software market, but that is indeed a different market. APple is the only ones doing this that i know of in the hardware market
ok what about the rest of the computer hardware market.
the consumer electronics market
the tech industry as a whole, except maybe the software market, but that is indeed a different market. APple is the only ones doing this that i know of in the hardware market
iPod's are in the consumer electronics market, not the computer hardware market. What do you think the profit margin on bose or bang and oulfsen consumer electronics brands are like?
Apple maybe selling iPods for double the price it costs to build them. But think about all other costs: R&D, fixed costs (somebody has to pay for Apple's offices across the world), salary (Apple has to get money somewhere to pay its employees) - after you add all that up and substract corporate taxes, Apple maybe making 10-30% on each iPod.
umm yeah did you read my post. that middle line right there "the consumer electronics market"
i bet they are not doble the price of the hardware
It'd be nice to see what value the ipods have inhouse before store markups are added though.
It'd be nice to see what value the ipods have inhouse before store markups are added though.
That still doesn't explain why it's nearly 20% cheaper to make, yet the same price as the previous model.
It'd be nice to see what value the ipods have inhouse before store markups are added though.
That still doesn't explain why it's nearly 20% cheaper to make, yet the same price as the previous model.
Because they did that breakdown of the 2nd gen iPod nano a year ago? If they were to see how much a 2g iPod nano were to cost Apple today, I don't expect any drastic changes in cost. Besides, none of the BOM ever include R&D costs, marketing, technical support, or "frills" stuff that makes a good product a GOOD product.
It'd be nice to see what value the ipods have inhouse before store markups are added though.
That still doesn't explain why it's nearly 20% cheaper to make, yet the same price as the previous model.
Because they did that breakdown of the 2nd gen iPod nano a year ago? If they were to see how much a 2g iPod nano were to cost Apple today, I don't expect any drastic changes in cost. Besides, none of the BOM ever include R&D costs, marketing, technical support, or "frills" stuff that makes a good product a GOOD product.
Yes and investments made by outside sources have absolutely zero bearing on money coming in to Apple.
It'd be nice to see what value the ipods have inhouse before store markups are added though.
That still doesn't explain why it's nearly 20% cheaper to make, yet the same price as the previous model.
Because they did that breakdown of the 2nd gen iPod nano a year ago? If they were to see how much a 2g iPod nano were to cost Apple today, I don't expect any drastic changes in cost. Besides, none of the BOM ever include R&D costs, marketing, technical support, or "frills" stuff that makes a good product a GOOD product.
So you're saying that Apple spent 20% more on R&D, marketing and technical support for this generation of Nano than the previous generation? That they just happened to even up thier costs with the previous generation's profit margin?
OR is it possible that Apple is making more money because they know people are dumb enough to pay the price they ask?
I would have thought all or the majority of the R&D costs would have been recovered in the preivous models. Yes the new model is smaller and the casing are all different but essientials an IPOD nano is an IPOD nano.
I would have thought all or the majority of the R&D costs would have been recovered in the preivous models. Yes the new model is smaller and the casing are all different but essientials an IPOD nano is an IPOD nano.
absolutley, the R&D costs on the ipod are going to be miniscule, and already made back by all the other ipods
think rip-off
software is also not really comparable to hardware, as you relaly are just paying for packagin, once R&D is got back in software you are looking at almost pure profit
who? who do you know that marks up thier inventory 1000%?
I think jobs should include a small jar of vaseline with every purchase. Then again, Apple clones probably enjoy taking it up the poopshoot when they buy his products....
There's a cost to best-of-breed. Apple doesn't care to sell products to everyone. Just to people who have taste.
There's a cost to best-of-breed. Apple doesn't care to sell products to everyone. Just to people who have taste.
haha well you can spend twice as much doign it too.
p.s. anyone that thinks AV is a waste of processor is a waste of oxygen
There's a cost to best-of-breed. Apple doesn't care to sell products to everyone. Just to people who have taste.
LMAO...Thats the sheep mentality that Apple relies on!
Dont be taken in by the clever marketing, owning an Apple product does not automatically mean you have taste! Quite far from it!
Apple IS the OEM.
Apple IS the OEM.
Um, exactly. What part of Original Equipment Manufacturer do you not understand, Tikitiki?
apple are in the business of making money... if you can make a cheaper product, then it makes perfect business sense.
of course, the product should still work
do the math, you are looking at a few cents / unit in R&D
so wheres that extra $100 odd dollars coming from ????
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