Researchers rip iPad apart to reveal Apple's profits
While Bill Gates just rips it apart
Apple stands to make a profit of up to $483 per unit on its iPad according to a very literal breakdown by industry analysts iSuppli.
The research firm said the total cost of materials and manufacture for Apple's big iPhone ranged from $229.35 for the 3G-less, 16GB version, which sells for $499 to $346.5 for the top of the range 3G 64GB version, which carries a $829 price tag.
While the top end product produces a profit of $482.85, it is the 32GB 3G version which iSuppli says will produce the biggest chunk of profit. That's because while it sells at $729, its manufacturing cost is a mere $287.15, less than 50 bucks more than the bottom end iPad, producing a bumper profit of $441.85.
iSuppli points out that the vast majority of the costs remains standard across the range - the display, processor, networking, and other components remain the same in every model.
Differentiation comes with the addition of 3G at $24.50, GPS at $2.60, and Flash memory.
The figures are a tribute to Apple's ability to press its users' buttons - and wallets.
However, it has not impressed everyone.
Bill Gates dissed the iPad to the Bnet blog yesterday. "It’s a nice reader, but there’s nothing on the iPad I look at and say, ‘Oh, I wish Microsoft had done it," he said.
Gates reckoned a mix of voice, pen and a real keyboard was the way forward. He has of course been a fan of tablets for years. On the other hand, that enthusiasm never translated into wide takeup of Microsoft's attempts at tablet PCs. ®
I don't know where to begin with the pointlessness of this story.
iSupply did not rip apart an iPad. They've speculated on the parts involved, and the typical price for these to come up with a Bill of Materials (BoM).
Now, unless Apple can get all their R&D done for free, marketing for free, everyone works for free. Free electricity, water and rent. Indeed, free everything else; the margin between the BoM and selling price is not profit.
As for Bill Gates? Why can't he just let it rest? His concept of touch, pen and keyboard tablets have been around for nearly 10 years now. And hardly anyone wants one. Bill, you concept failed. Get over it. Let's see what happens to Apple's take on the tablet...
Bill of meterials != cost
Not all the gap between the cost of materials to the sales price is profit. First of all, assembly does cost something. Even of it is automated, the machines that do the assembly and the buildings that house these machines must be paid for. Secondly, development costs must be paid over the price of the sold units. Apple designed their own SoC for the iPad, which is not cheap. And there are lots of other such costs that need to be recovered through the sales price.
That said, the incremental cost of producing one more iPad is fairly low, so when Apple have recouped the fixed expenses, the price of the iPad is likely to fall.
It's all about the 'experience'
Yes you have to drink the pint to appreciate it fully, however do you drink pint A at your local boozer at a max price of £2.50 or do you drink pint B made by the same brewer and may even be from the same batch, it tastes the same and has the same effect but costs £5 at the 'trendy' bar because it's all about 'the experience'?
I'll be at the boozer spending half as much and wilI have cash left over for a kebab and taxi home. Plus the boozer keeps me away from those irritating twats who think 'image' is everything and throwing money away on a product that is inferior to other offerings but costs twice as much is a sensible thing to do.
Not from me........
They will not be making any profit from me. Having experienced one apple product (iPhone) thats enough to put me off for life. Its not the device - it's the level of control over it's usage etc that grates. With apple that will only get worse.
It's win or linux slates for me and an android based phone..........
Bill G - no comment?
"As for Bill Gates? Why can't he just let it rest? "
Do you really think he called a journalist to bitch about the iPad? Or do you think he was asked in passing what he thought by the blog writer? He gave a response of general indifference, but also said "It’s a nice reader". What more do you want? Not to mention he was a fan of the iPhone.