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- Quix, on 10/12/2007, -53/+336In related news, Windows Vista costs 10 CENTS TO BUILD (a single DVD) yet sells for up to $399. Where's the outrage?
- bgiese, on 10/12/2007, -27/+177Of course they didn't actually have an iPhone to teardown. This is pure speculation.
Also, this doesn't cover any of the R&D costs associated with the iPhone. - rockforever, on 10/12/2007, -64/+191Your not paying for a phone, your paying for that Apple logo.
- anonatron, on 10/12/2007, -7/+107I am sick of seeing "looks like X company is being pretty greedy"
Do you people realize that the idea of a business is to make money? As a matter of fact, it is their responsibility to their stockholders to make money. Think of it this way, if you owned shares of apple, wouldn't you want them to make as much profit as they can so that you can actually have stock worth owning? - AmishRefugee, on 10/12/2007, -73/+143yeah, R&D is half of the cost of each iPhone....
touchscreen + harddrive + cellphone = a ***** of R&D? not really, no...
Although, I bet a huge portion of the remaining $250-$300 is going towards Apple's unbelievably large advertising campaign which will undoubtedly flood us with more advertisements than any human brain could possibly handle in the coming months. - Ligeia, on 10/12/2007, -23/+90So this is just like every other cellphone?
- SPARTACVS, on 10/12/2007, -24/+82God I hate it when people say "M$". Hey look, I'm cool too! APPL€ SUCKS!
- jollyllama, on 10/12/2007, -6/+51Wait, who thought that manufacturing costs are the only costs of making any product, much less a high tech product that requires a ton of engineering and software design? Think a little longer before jumping for the sensationalist headline, folks.
- FishyJoe, on 10/12/2007, -6/+46Software writes itself and is free, right?
- cr125er, on 10/12/2007, -3/+43My thoughts are we need a ***** iPhone tab on the top of the page.
- CasaMan, on 10/12/2007, -1/+32You guys realize that most of the cloths you wear cost < $2 to produce?! And yet you pay more than 2000% off it's production costs! (damn those corps :P)
- jcapogna, on 10/12/2007, -6/+36I was under the impression that the iPhone cost $40 million to develop.
- FuManchuX, on 10/12/2007, -4/+27Come on people.... the phone isn't pure profit after the cost to make it.
Operating expenses can easily cost half. It takes a lot of people to move all the parts around, get them assembled and then ship them to stores before they're sold to you.
And yes... R&D is expensive. I'm sure millions of dollars were spent just to program the interface. - D4r7h3v1l, on 10/12/2007, -0/+20No, they were "have" and "kids".
- inactive, on 10/12/2007, -3/+22OS X costs $7?
And what about the built in speaker? - colincornaby, on 10/12/2007, -5/+20And software R&D is free?
Using this logic computer games should be a $1 because they cost about 50 cents to burn and package. - eschompthis, on 10/12/2007, -10/+24Apple you Son of a Bitch. I love my macbook though :)
- Justinguder2, on 10/12/2007, -9/+23Why does everyone on digg defend apple?
- pjleonhardt, on 10/12/2007, -0/+12Do you know how business works? EVERY company charges for their R&D..
- InSeverance, on 10/12/2007, -1/+12I still think that the price point is high, too high for me to look at paying for v1 of the iPhone, yet I think Apple marketed the price point well at Macworld.
With all the "wows" and the press coverage they have received they have created the perception that the technology us worth more than it may be / is (impossible to tell how much has been spent on the respective technologies as an outsider).
However Apple will use the halo that they have created with the Keynote to justify such costs to consumers, regardless of it's physical and actual costs, and I would guess Google and Yahoo get a small cut somewhere a long the line.
They will easily make a profit, but I think until all the costs of have been accounted for, or are at least close to being accounted for expect a large divergence between cost and price. Then, we may, or may not see a fall in price and increase in specs. - kcpwnsgman, on 10/12/2007, -0/+10Note that with everything that software costs money, even though they said that OSX is running on the iPhone, it still cost money to develop it to work on the phone, practicly redesigning it to lower specs which would probably increase the cost by about $200, and don't forget the contract you have to pay for with Cingular...
edit: FishyJoe beat me to it while I was reading the article - Goner, on 10/12/2007, -0/+10direct to original iSuppli article: http://www.isuppli.com/news/default.asp?id=7308&m=1&y=2007
- stuartjmoore, on 10/12/2007, -1/+10actually a new multi-touch screen probably does cost a lot of R&D.
- bonexaw, on 10/12/2007, -1/+9$250 is about right for this. For standard products the COG (cost of goods) as shown is around 1/4th the retail price.
Say something costs $1, generally a company wholesales it for $2, and then retails it for $4. Apple being the retailer and wholesaling to itself, a 2x multiplier (3x if you add in the $200 or so (spec) Cingular is giving them for the 2 year contract) is about right.
Yes I know, it's SHOCKING that Apple is making money on its phone. Oh wait, they aren't selling an XBOX or PS3 where they make money on games they sell. They have to turn a profit out of the box. - Caiman, on 10/12/2007, -19/+27Capitalism! Apple could charge $750 for the iPhone and the sun would sitll be shining out of their arse for the groupies.
- scabbers, on 10/12/2007, -6/+131. Slave wage workers in China
2. Rabid fanboys with trust funds
3. Profit! - colincornaby, on 10/12/2007, -3/+10"While you are right, why do I get hte feeling that you broke a few keyboards pounding away at how ridiculous Sony was to be charging $600 for a PS3?"
Don't get me wrong, the components in the PS3 are a steal for $600. But I think the PS3 is more power than the average consumer needs. Sony is shooting themselves in the foot by putting in such high end, expensive components.
The iPhone is going for the market of people who are already willing to pay that premium for the phone. Apple already knows this version of the iPhone will be restricted to the upper 1% of the market, while Sony acts like everyone and their mothers will be buying PS3's. - kdmaster, on 10/12/2007, -2/+9with this logic, microsoft vista costs only $1 to make.
take that, "dell is swell" people - dcbebop, on 10/12/2007, -14/+21If you buy an Apple laptop, you're free to choose your OS, browser, text editor, etc. You can customize the look and feel and install any applications you want on it. iPod, the same thing ...
If you buy an Apple iPhone, you're free to choose from one provider and feed into their required 2 year agreement. You can't customize it and you can only install Apple software.
What's wrong with this picture? What happened to freedom of choice Steve? - siggyfawn, on 10/12/2007, -1/+7Apple has things like, uh buildings? Employees? Advertising? Research?
I love the moron who said "they make $320 pure profit!". *lol*
The percentage of people here who don't own stock is staggering. Go buy some Apple stock. Then come back and tell us how "Apple is ripping people off!". When it's going into your pockets, you cheer on excessive corporate profits.
Anyone here with a retirement fund? Keep hoping for high oil prices, a chunk of your retirement is probably riding in the energy sector. Wow you mean average joe's can make money off public companies? Crazy how the world works.
But coming from a junior in high school, at the computer lab, those "profits" are FNKIN NUTZ WFTZORS. - hazlett, on 10/12/2007, -1/+7Now let them break down the cost of "making" a loaf of bread, parts probably only cost pennies........then realize, please, that cost has NOTHING to do with price.
Anyone who thinks cost should equal price needs to learn some basic economics. - thegreyfox, on 10/12/2007, -6/+11I wanna live in your country, where u can use both US dollars and Euros to buy things. Must be nice.
- FuManchuX, on 10/12/2007, -2/+7From an accounting viewpoint, Apple does have to charge itself for it; in order to run the books correctly.
- unibomber999, on 10/12/2007, -1/+6It doesn't matter what it costs to make, the price is $600 because their market research found that people will pay it. Early adopters get to pay for the R&D that the rest of us enjoy.
- bibbles, on 10/12/2007, -0/+5ok undersky you win the stupid contest
- brlittle, on 10/12/2007, -2/+7This is news?
I take it you guys all saw the launch prices on, oh, I don't know...the RAZR, maybe? Care to hazard a guess on Big Moto's profit margin on those?
Of course, dissing Moto doesn't score you the kind of points with the cool kids that hating on Apple gets, so I suspect I see where this is pointed. - Clevinger, on 10/12/2007, -0/+5http://duggmirror.com/tech_news/iPhone_Costs_Only_245_83_to_Build/iphonecosts.jpg
That's all that Duggmirror gives, I checked. - meatmcguffin, on 10/12/2007, -1/+5Apple can "rate" my "rack" ?
- Sun.Surfin, on 10/12/2007, -5/+9@ dcbebop
Freedom to do what on the iPod? Play songs/ video converted into Apple's supported formats and uh... wait, I think that's it! You have no freedom of customization on the iPod. I can't change the look, I can't change the feel, and I sure as heck can't put my own applications on it. Before you say "OMG iPod Linux!!!", I have a 5.5 80gb iPod Video, and Apple has managed to lock out Linux from being used thus far... - Jakesterama, on 10/12/2007, -1/+5labor anyone? (for you in the UK "labour anyone?")
If you broke it down into the elements, I bet there is only $5 worth of metal and plastic in the thing, or in most products now-a-days, that doesn't mean that those are the only costs involved. - hansamurai, on 10/12/2007, -2/+6Bury, wrong topic. File under Apple so I don't have to see it.
- CCB0x45, on 10/12/2007, -2/+6@m3mn0n
Probably the dumbest comment I have ever heard... by charging yourself, do you mean paying your employees to do whatever work was needed to convert a large os which runs on a completely different platform, to a small lean OS on a new phone platform(PPC and Intel vs ARM). They don't charge themselves, they pay employees for the work... and that money doesnt come out of thin air, it comes out of the consumers pockets. That is capitalism. When I pay you 3 bucks a gallon at the gas station you work at, a few of those cents are going to pay your over all 7 dollars an hour, and I don't see you complaining about that. - cleverboy, on 10/12/2007, -4/+8It's interesting. In the game industry, both Sony and Microsoft's boxes were broken down by price estimates, and its clear that they're both taking a dive on the cost of the hardware, hoping to make it up in software sales and licensing. Not Wii though... breaking it down, Nintendo is clearly looking to profit on their great hardware ideas AND their licensing, and STILL can't make them fast enough! The iPhone will cost consumers about as much as a Playstation 3 (currently sitting in mounting piles on eBay and in nervous basements around the country, after the bottom dropped out), and I don't think Apple has much to worry about when it comes to it being a losing venture.
I like companies that have a clue about their demand, and look like they're offering a well thought-out offering, even if not wholly on par with the rest of the industry. I don't expect businesses to take a BATH on their costs just because customers whine about it. I expect them to make their money by knowing their market. Whether its by being a loss leader (Microsoft XBox 360, Apple iTunes), or a cash cow (Microsoft Windows, Nintendo Wii, Apple iPod, Apple iPhone)... I'll be right there with money in hand, if I like the smell of the total packaghe of what they're cooking. Everyone else can cry in their beers and try again. Don't hate them 'cause they're setting the world on fire. Jobs has said the cheaper iPhones will come in time. I remember when Apple released its $400 iPod, and I could only use it on my Mac. I didn't want a bulky freaking Nomad, and I'd just tearfully purchased a compact, and irritatingly high-maintenance Sony Mini Disc player. With tear filled eyes, I made my iPod purchase and never looked back. As much as I love my Sony Cli, no Treo or Windows Mobile has given me the allure and confidence this iPhone is projecting.
How much did it cost Apple? I don't care. If it saves me as much peace of mind as my first iPod 5 years ago... its not really going to matter. It's also no surprise that the only game system I plan on purchasing sense I got an Intellivision for Christmas lo' so many years ago is the Wii. Provided I can find one. - ShiN3R, on 10/12/2007, -0/+4First of all, if you have a cell phone, you are already paying for service. It doesn't make sense to add this and blame someone else. And if you have to pay a deposit to get cell phone service you might just want to use a payphone and work on your credit.
- wastern, on 10/12/2007, -2/+6lets see, 2 1/2 years of R&D and development. Software. Distribution. Advertising. And god forbid they make a profit.
Apple is a business and like every business their goal in the end is to make money for their stockholders. You don't create value in a company by giving away things for free
Why don't you go buy some parts and build your own iPhone if you think you can do it so cheap - tensvb, on 10/12/2007, -0/+4Good point, melt the plastic and metal and hey, iPhone costs only 5$!!! Greedy Jobs....
- bibbles, on 10/12/2007, -1/+4Look how expensive other smart phones are: http://reviews.cnet.com/4323-6525_7-6509102.html?tag=dir
Sony Ericsson P990i: $555-$749
Cingular 8525: $400 w/contract
Palm Treo 700p: $400-$679
LG KE850: $778
These are the phones that the iPhone is competing with at the moment. eventually you guy's will realize the iPhone is cheaper than a $300 phone + and iPod Nano, which is exactly what the iPhone is, with more functionality, a slick interface, and it takes up less space.
RIM BlackBerry 7130c: $200 w/contract
T-Mobile Dash (aka HTC Excalibur): $250 w/contract
RIM BlackBerry 8700g: $300 w/contract
T-Mobile SDA: $300 w/contract
Samsung BlackJack: $200 w/ contract
RIM BlackBerry 8703e: $250 w/contract
Add $200-$250 onto any of these (the cost of a Nano) then note that the interface on most of these is total ***** to use. The iPhone is also smaller/slimmer, and more functional, then suck a dick or two! :o
THREAD OVER - inactive, on 10/12/2007, -0/+3I'm not paying £250 for the 4gb.
- KyleMistry, on 10/12/2007, -2/+5"Although, I bet a huge portion of the remaining $250-$300 is going towards Apple's unbelievably large advertising campaign...."
"Hi, I'm an iPhone."
'And I'm a Windows Mobile PC." - michaelfedigan, on 10/12/2007, -0/+3It also seems that anybody that's taken an accounting course would realize that raw materials cost don't mean that's what the product costs to make. I don't see anywhere costs included for overhead, labor, Apple advertising etc...
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