http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/ Engadget Comments for http://www.engadget.com/media/feedlogo.gif http://www.engadget.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 10:20AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Well if its made in China its probably $0.0001 a iPad]]>Apr 7th 2010 10:21AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 10:23AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Yeah, I know there are a lot more factors here than just materials and Manufacturing, (e.g. R&D, shipping, etc..), however, I figured that at least knowing manufacturing in addition to materials would give you a much better estimate than just "materials".]]>Apr 7th 2010 10:25AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
same components as an iPhone plus bigger screen and battery !

well yea maybe a little more complex but still...]]>Apr 7th 2010 10:27AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/No dude, even if everyone that bought an iPad came back and had it replaced for a bad battery, Apple would still cut even. Im telling you, they are too greedy and smart to not have everything covered systematically. If only we could pay iSuppli to make us one for $299.]]>Apr 7th 2010 10:31AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Total profit will also change. Once they've made back their money that they put into development and initial marketing, they can claim much more of the actual profit as profit. At the same time, though, I expect several of the competing tablets we have seen here will be out, and Apple will lower its prices. Of course, to Apple, a "discount" is making a $499 device $389.]]>Apr 7th 2010 10:33AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
But if we "pay" them to make us one for $299, wouldn't it cost more than $299? I'm just sayin....]]>Apr 7th 2010 10:33AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/warranty issues? im told apple products are made by the hands of God himself! they last forever. and last time i check, forever is a very long time.
/s]]>Apr 7th 2010 10:35AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Agreed. ]]>Apr 7th 2010 10:37AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
I can't believe that a company would make something and have the nerve to mark up the price and sell it for more to make profit!]]>Apr 7th 2010 10:38AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 10:45AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
I agree, There was probably a crapload of R&D in this thing, as in all devices.

I worked for a company that did everything in china, and you have Research and Development, US import taxes & tariffs, Shipping, aluminum Mold costs, as well as buying and installing all of the robotics and machinery on the production line.

Ok, so bare minimum for components is $259.60, but add all of this above to that, and the 16GB could be a loss, with the other two versions making it up.
]]>Apr 7th 2010 10:45AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
All of that costs money to develop... This is without talking about the A4 PoP CPU... The pictures of the inside of the device kind of tell you how much they thought about every single thing inside the device.

Btw I buy Apple products for the software. I wouldn't touch their hardware if it wasn't because their software just works like you expect it to.]]>Apr 7th 2010 10:46AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Also, what few people consider, this should actually bring the BOM in the iPhone down, though one would need more inside information to confirm and it could have offsets such as opening new production lines or switching production during business hours. ]]>Apr 7th 2010 10:48AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Cost of magic (powder or in liquid form) that fuels fanboyism: $50/ml
Cost of canned unicorn meat: $9.99/each
http://www.thinkgeek.com/stuff/41/unicorn-meat.shtml
]]>Apr 7th 2010 10:52AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
At $299, for a device that will sit on my coffee table or bedside, seems like a better deal. ]]>Apr 7th 2010 10:56AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Its a much better deal at $299, I saw an interview on nytimes with a guy on the street, he said he was going to buy an ipad eventually. When asked why he replied, "well, to be honest, its more of a collectors thing", then he proceeded to rattle off all the other older apple products he had.

Sometimes people just want a cool toy to play with, doesn't have to be perfect.]]>Apr 7th 2010 11:08AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 11:13AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Actually I disagree with iSuppli. I wonder what do they base their material costs on.

My guess, being a business owner myself, would be the total COGS would not exceed 1/3 of the selling price. So pure profit would be about half. If the "bill of materials" is at half the selling price, Apple would make very little. That is simply not good business sense.

On top of that, one has to remember that while doing manufacturing of such devices, usually heavy discounts are given from supplier to the assemblers.]]>Apr 7th 2010 11:18AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 11:23AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
how come Apple is exempt from this typical business model and are allowed to be greedy without impunity? oh is it because it's shiny, can make you breakfast, cure cancer, and scratch your back? give me a break.]]>Apr 7th 2010 11:52AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Actually I agree. No flash almost made me not purchase the thing. In my opinion however, the iPad is a good "gadget" to play with, and I expect to get many months of entertainment out of it.

For my practical device, I use a netbook.]]>Apr 7th 2010 11:54AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 11:54AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Is the iPad worth the $500? IMO no, not unless you are interested in playing with an iPod Touch XL. I personally see very little "practical" use for this (in my life anyways). I bought it purely as a novelty item.]]>Apr 7th 2010 11:58AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
That's such a stupid argument, particularly as an iPhone costs more. If you can't understand the difference a larger screen makes in not only UX but the overall utility of the device, stick to commenting on cosmo.com]]>Apr 7th 2010 12:18PMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 12:21PMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apple could have sold this at a loss and made up the difference in sales of content. On the same note, fools did not have to buy the thing either.

Actually price points would be a lot better for you Apple fans if you were a little more discerning. If you turned your nose up to these items when they came out due to price, Apple would not keep slamming you with these high prices.

http://www.usingenglish.com/reference/idioms/a+fool+and+his+money+are+soon+parted.html]]>Apr 7th 2010 12:37PMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 1:12PMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 1:16PMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/"Exempt"? Exempt from choosing to lose money from their business? Selling your machines at a loss and hoping to make it up in software sales has shown that it does not work (and it definitely would not work for Apple, as the revenue from the apps is too low). Sony and Microsoft's gaming divisions haven't come close to making back the billions they've lost over the years. They offset the losses with the profits made in other divisions. By the time they could even get close to breaking even, a new console will be out and the same loss cycle will start up again. While Apple COULD do that, they have no reason to, as they don't have a 2nd competitor that nips at their heels.]]>Apr 7th 2010 1:56PMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/At least your comment got in first before the inevitable ZOMG 100% PROFIT MARGIN morons.]]>Apr 7th 2010 3:06PMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Yes a company needs to make profit. Yes, they're doing the right thing in milking fanboys. But to pretend as though they need a 66% profit margin so that they can stay afloat is beyond absurd.

Many industries rely upon much smaller profit margins. Take cars: mainstream cars for example take about 10% in profit margin ($20k car makes $2k), whereas luxury cars make 25% (say a BMW). And there's significantly more overhead in automotive--they have in-house manufacturing, often within the US, thus increasing overhead more (not to mention marketing, R&D, etc).

Apple pretty much outsources all of its production to Asia, keeping production costs way down. The iPad is based on the iPhone OS, which also keeps costs down. Saying the company is right for making money is one thing. Saying it needs that 66% margin for covering the overhead is laughable. ]]>Apr 7th 2010 3:31PMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
When they manufacture a product, it costs more than just the cost of the parts.]]>Apr 7th 2010 5:10PMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Then as others have pointed out, the software had to be developed and tested. It's not just the iPhone's OS running the iPad, they had to customize the UI for it. What about porting iWork to run on it with an entirely touch interface? You can bet at $9.99 per application, Apple's not making money from selling the three apps, a lot of that development cost came out of the iPad budget because it was important for the iPad's overall success.

Don't get me wrong, Apple is making a comfortable profit on the iPad, but it's not as high as you're limited concept of business is trying to make it out to be.]]>Apr 7th 2010 9:04PMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://bit.ly/tablet-by-microsoft-future]]>Apr 8th 2010 5:55AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 8th 2010 8:38AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
This is entirely unreasonable when you see that the average iTunes customer spends $2 per month on iTunes content.* That's 60¢ for Apple to cover their costs and a profit of maybe ¢0 to ¢20, depending on the kind of content, or less than $5 over 2 years (lifespan of one device).

What's new about the iPad ist that it offers a lot more opportunity to waste money on iTunes, but it also offer lots of free options (with the web at the top of the list) as well as clients for competing services like Netflix and Kindle which do not pay a dime to Apple. Overall, iPad users will not spend an order of mangitude more on digital content than iPhone or iPad users. That, however, would be a prerequisite for Apple to offer the iPad as a loss-leader.

It's very hard to discuss Apple as a business if people come in with the fixed idea that it's a complete rip-off and shoe-horn every single step the company makes into that preconception. If you are actually interested in what Apple makes on their products, check out their financial reports. The net margin is no more than 20 %. iSuppli is pure flamebait.

* iTunes had 150 million registered customers and about $1 billion in revenue last quarter.]]>Apr 8th 2010 8:59AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 10:21AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/And that's not counting the discount they get from parts bought in China in bulks. Also, labor is being done overseas which offsets R&D. Wait, Since this is just a bigger ipod, then there is no R&D ;)]]>Apr 7th 2010 10:58AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 10:22AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Except most compnaies squeeze 15% from their customers as profit not Apple's usual 40% which with the iPad is looking more like 50%.]]>Apr 7th 2010 10:24AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
http://www.amazon.co.uk/Htc-Nexus-One-Google/dp/B00332YPHQ/ref=sr_1_1?ie=UTF8&s=electronics&qid=1270650496&sr=8-1

http://www.isuppli.com/News/Pages/Google-Nexus-One-Carries-$17415-Materials-Cost-iSuppli-Teardown-Reveals.aspx]]>Apr 7th 2010 10:31AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/Apr 7th 2010 10:32AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
You also need to adjust for labor and engineering costs; of which Apple will say brings the actual unit cost to around $10,000. So, you know, the iPad is a bargain!

Oh, those magical geniuses...]]>Apr 7th 2010 10:32AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/You correct, Every company does this, On top of that amount you have to add, years of R&D & labor during development, packaging design and cost, promotional & advertising, delivery, warranty returns, In the end, there's no where near the profit that people think there is.]]>Apr 7th 2010 10:33AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Also, Apple makes a ton of profit on their app sales even after their massive hardware profit.]]>Apr 7th 2010 10:33AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Apple is not bad on this one, i used to work in the hardware industry and the markup was between 75% and 160%

And they weren't products that involved R&D like a tech gadget with a huge touchscreen.]]>Apr 7th 2010 10:50AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
Don't attack him

Maybe you just don't realize how much money it costs to do this kinda stuff, okay so it costs 259 to build it plus man labor plus shipping to the states then shipping to the stores, paying for all the ships and trucks, paying for the employees to run the stores, paying rfor the electricity, heating and Internet for the store, pay the people who designed it who write software who update it...

I mean it really does add up guys]]>Apr 7th 2010 11:18AMhttp://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/http://www.engadget.com/2010/04/07/isuppli-pegs-ipad-component-costs-at-as-little-as-259-60/
...but not all companies have the same amount of profit...]]>Apr 7th 2010 12:17PM