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218 Comments
- eatrains, on 04/13/2009, -14/+128Um, the retail price minus the cost of the components is not profit. There is still development, manufacturing, marketing, distribution, patent royalties, etc.
- mhuggins, on 04/13/2009, -14/+125BREAKING: Company Trying to Make Money from Consumers!
- Ryan0617, on 04/13/2009, -13/+78This is business. Cant really argue against it, thats how business works.
- soopafly, on 04/14/2009, -12/+57How does Apple get away with charging $129 for the OSX DVD that it comes in? Or better yet, Adobe charging $2300 for CS4 when the DVDs only cost less than $1 each???
/s - ubpsanity, on 04/13/2009, -8/+48If they had added some buttons to control it, it might have cost 30% or retail.
- Cheesepuffly, on 04/13/2009, -31/+59Whats wrong with that? They make plenty of profits, and besides its not like its over priced, im not getting one but i think its fair priced.
- Nephersir7, on 04/14/2009, -11/+39No one in their sane mind should ever buy an iPod shuffle. http://reviews.cnet.com/4370-6490_7-761-101.html?t ...
- DanielPhermous, on 04/14/2009, -4/+28In a free market system, there is no such thing as a "fair" price or "reasonable" level of profit. In a free market, the price of a product is what the market will bear. Full stop.
You can charge whatever you like. If people think it is worth it, they will buy. If not, they won't. That's capitalism. - Chairboy, on 04/14/2009, -11/+31Good thing all R&D and marketing costs are free!
Wait, they _are_ free, right? They're not?
Then what's this post talking about? - darkane, on 04/14/2009, -2/+19Maybe you should try reading the article first, because there is nothing controversial about it. They broke down the costs to build the product, and finished it with the following:
"There are other costs in addition to components for which a teardown can't account: The time and efforts of software engineers and designers, industrial designers, manufacturing, distribution, royalties paid on patents owned by other companies, and so on."
Nobody should have to copy and paste it here just because you were too lazy to read the article before running your mouth. - saikyan, on 04/14/2009, -9/+25I'm no fan of the shuffle, but there is more to the price than materials... there's R&D, distribution, marketing, etc.
Looks like Businessweek is trying to make a splash with a "controversial" Apple article. - abajaj2280, on 04/13/2009, -11/+27... so?
- ehaugan, on 04/14/2009, -4/+17Again, the moron Apple haters on digg dont realize the article states the COMPONENTS cost Apple 28% of the retail price. Apple still has to pay for R&D, marketing, labor and about 1,000 other things before that iPod ever his the shelves.
- mmittimm, on 04/14/2009, -0/+13That's true, but they sell to retailers at nearly selling price making it a bit *****. From my time working electronics retail I can tell you that most retailers are forced to sell iPods nearly at cost while a majority of other mp3 players are sold at least $10 above cost. It's still a moneymaker because people usually buy other things to go with it, but considering how well it sells it really sucks for retailers.
- Me1000, on 04/14/2009, -0/+13Not for individual products. They are required to give their revenue and profit for a fiscal quarter, not a cost breakdown of their whole product line.
Besides you can't calculate profit margin from a parts breakdown, you must consider R&D, manufacturing costs, labor, etc. - aristotle0dude, on 04/13/2009, -4/+17Not to mention that not all units are sold through Apple stores so Apple has to provide retailers with some margin on the retail price and Apple stores themselves cost money to run (including staffing, property rental, utilities and advertising).
- Hardataq, on 04/14/2009, -10/+22Since when was Apple a charity?
- wisedude, on 04/13/2009, -9/+21Good for Apple. They act is if they are a monopoly in an industry which is in fact a competitive monopoly. And you know what? Their fans still buy their *****. Any company's dream
- GumGuts, on 04/14/2009, -4/+15Woah woah woah, did you guys take a basic economics class?
Get the ***** off digg, we don't take that kinda ***** around here
/s - kinseyincanada, on 04/14/2009, -3/+14seriously? make your own mp3 player?
- DarrenFreemont, on 04/14/2009, -1/+12False. You are discussing accounting, not economics.
You are right that DM and DL are accounted for within costs, but per unit profit encompasses all the other indirect costs, such as R&D and overhead apportioned to it.
If R&D only showed up in one huge bucket at the end of the year, how would anyone know what product became of all the work? Accounting is more than income statement analysis.
Accounting 100, please show up next time. - zenthax, on 04/14/2009, -2/+12@PandaBearShenyu
have you ever used a chinese mp3 player OS? - ZombieAnt, on 04/14/2009, -4/+13OMG. Companies trying to make a profit. Incredible.
Newsflash, EVERYTHING you buy is at least 3 or 4 times more expensive than what it costs to make. This is retarded. - ZimbuTheMonkey, on 04/14/2009, -3/+11Yeah, I couldn't agree with you more, utahnguy.
http://www.techdigest.tv/No.10%20Sansa%20Clip.jpg
How will people move with that thing clipped on, it is the ultimate hazard while shredding and doing other x-treme sports. - inactive, on 04/13/2009, -28/+36If one is USED to overpaying for products, they will never complain about it being overpriced, or if one is not aware that other cheaper products exist (IE: effective marketing), they may get upset.
I buy Sansa products. Cheap, and FAR easier to use than Apple products (no drivers needed, plug it in, detect then drag and drop). - arvana, on 04/14/2009, -4/+12It's pretty typical for manufacturing costs to be around 25% of retail. On top of that there is distribution markup and retail markup -- most retailers expect to get their stock at around 50% of retail price, depending on the market. The manufacturer can usually expect something like a 10% profit margin, out of which comes marketing, R&D, and overhead. There is nothing outrageous here.
- suprememilo, on 04/14/2009, -0/+8DO NOT discredit R&D unless you want to do my basic electrical engineering homework for me, it will make you cry.
- Nephersir7, on 04/14/2009, -10/+18http://www.amazon.com/gp/product/B00126V8WU 'nuff said...
- soopafly, on 04/14/2009, -3/+10I tried that, but the duct tape kept coming loose and the motorcycle battery just would've fit in my pocket.
- lnxfi, on 04/14/2009, -3/+10wrong.
you don't think that Best Buy (for example) buys the <insert any product here> at retail cost...do you? also, don't forget warehousing, shipping, thy guy who types in the PO... etc.
I work at a book publishing house. It costs us $3 a copy to print while you pay 32.95. Just because the actual cost of the final product equals a certain percent - that doesn't mean there are not other parts to the process. - PabloIV, on 04/14/2009, -6/+13yeah my ex did that.
The OS was piece of crap and it was the worst hastle to get it to do anything right. - PabloIV, on 04/14/2009, -6/+13Wait, Apple overcharges for things?!?
That said, if people are willing to pay it, charge whatever you want. - inactive, on 04/14/2009, -0/+7Show me how to make my own mp3 player plox. I don't disbelieve you, I just want to know what's involved.
- mbraynard, on 04/14/2009, -6/+13'Fair' is what someone is willing to pay for something.
It's called 'economic freedom.' - jennyvan, on 04/14/2009, -0/+6Apple will charge as much as people are willing to pay for their products.
--Captain Obvious - JustAn0th3rFace, on 04/14/2009, -0/+6THIS JUST IN: Companies in business to make MONEY
- DarrenFreemont, on 04/14/2009, -0/+6My original point was that you called 'accounting' 'the economy.' Which is quite wrong, what with economics being pure theory and accounting being pure real-life numerical grunt work.
I considered arguing with you and discussing absorption costing and sunk costs and how just looking at an income statement still has nothing to do with costs...
but then you said since labor costs are low, shipping costs are low and apparently R&D is now magic, they don't count.
Wrong. Use all your textbook words you want, you're missing the big picture if you actually believe those statements. - jennyvan, on 04/14/2009, -0/+6Meh...if I found an Ipod too overpriced I think I would just buy a cheaper MP3 player for about 30 dollars, over making one. I'm all for saving money and homemade stuff, but I have to stop at making my own electronic devices (depending on what it is...of course)
- bigdoof, on 04/14/2009, -3/+9Way too big? Seriously?
http://www.amazon.com/gp/customer-media/product-ga ...
I find it remarkable that a device with NO physical interface can be seen as a virtue by Apple's brainwashed fans. The shuffle's lack of controls is now a *benefit* since it prevents you from controlling it dangerous situations? You're an idiot. - Nysul, on 04/14/2009, -0/+6Wow it supports FLAC? (throws my creative nomad jukebox zen nx in the trash).
- NeoTechni, on 04/14/2009, -17/+22"its not like its over priced"
72% profit = overpriced - stealthspc, on 04/14/2009, -2/+7This is an outrage! How dare they!
/s - erictheninja, on 04/14/2009, -0/+5PandaBearShenyu, you mean GAAP, not the economy. shark72's right. Your bickering over symantecs made me digg you down.
- Braxo, on 04/14/2009, -8/+13How about I pay people 100 dollars to make me one, instead of me spending time and a fraction of the cost making a crappy one. I'll pay Apple to do that.
- bovox, on 04/14/2009, -0/+5Maybe fat Digg users who never exercise wouldn't buy one, but normal, healthy, athletic people who regularly exercise--aerobics, run, etc.-- are buying it in droves. It's a great companion for long runs.
- Lane, on 04/14/2009, -8/+13and yet you can get a non branded 8 gig player off ebay for $30 shipped from china, go figure.
- lnxfi, on 04/14/2009, -0/+5same concept
- diggdiggerid, on 04/14/2009, -1/+5I'd say the best indication of whether or not it is a "fair" price is whether or not people buy it.
Your "argument" might have more weight with utilities such as electricity or water where people will pay whatever it costs because they have to, but not with a commodity such as an electronic device that plays music. That's an entirely optional purchase and if someone bought one they thought the price for it was worth at least as much as the time they worked to make that money. Hence, it was fairly priced. QED. - Peko, on 04/14/2009, -8/+12FTA - parts cost ~21%. Includes physical player parts and packaging.
Does not include - shipping, placement, R&D, and yeah, something apple does - marketing.
That's all before profit.
Protip: The food at a restaurant is only about 30% of the price. The rest is all markup, right? - ZebraApocalypse, on 04/14/2009, -0/+4Do you think Steve Jobs is immune to the Vulcan Death Grip?
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