DETAILS WITHIN - This goes against what I have been reading here. That the margin on iPhone X was smaller than on 8.
There is nothing wrong with that, as long as it performs as promised and people are buying it voluntarily.
One thousand? Nope,not even if I was a billionaire.
Does not seem complicated - if it’s worth $999 to someone, buy one; if it’s not, don’t. If somebody else can make and sell one at a price closer to three-to-four hundred bucks, buy theirs.
Add seventeen percent and that is what the real price should be.
A 59% margin is not too much. It used to be wholesalers gave retailers a 100% markup margin so they would carry their products.
This whole Chinese race to the bottom price war has retailers often with nothing but a 2%, that’s right, 2%, margin.
Firearms often have $10 or $20 markups on $700 Firearms.
Booze has nearly nothing of a markup. A case of beer can be just 10 cents!
If Apple, or any other company, can get 59%, more power to them. No one gets ahead on 2% markups.
I do not own an Apple product. I hate Cook, but good for them. Apple is forcing no one to buy its product. Good for Apple—that is what is called freedom and free enterprise.
How do they calculate the price to manufacture? Do they allocate all the research, development, and corporate overhead to each iPhone? If you don’t charge your overhead back to your actual products that produce revenue, your accounting is not really accurate.
Like those little Bose Cube speakers.
Ping.
That cost does not include the programming and testing that went into new features like the facial recognition, or the development of some of the new hardware features. If the device is a hit, Apple will make oodles of money, but they are not netting 65% on each sale.
And tens of thousands of idiots will sleep in line for days to be the first to get them.
I left a $55 dollar white dress shirt made for about 25cent in Bangladesh sitting at the Kohl’s checkout counter this evening.
Seriously, the iPhone is incredibly under-priced when you consider all that it does. Back in the early 1990s, I paid almost $3,000 for a computer with a 20MHz processor, 2MB of RAM and a 80MB hard drive. Yes, 80MB - which is barely enough to hold one album of MP3s!
The typical iPhone of today is millions of times faster than all the computing power of NASA during the moonshots.
Like I said, the iPhone is incredibly underpriced.
Restaurants easily charge 3 times the cost of ingredients. Starbucks probably charges 30 times.
I’m sure that just like with the Pharma industry reporting, they aren’t including the research and development costs and only the physical manufacturing costs.
Q. How do you shear sheep?
A. Make an iPhone for $358 and sell it for $999.
Much like the outrageous markup of contact lenses which take just a few cents to manufacture. Hubby’s PhD is in Optics and testified about this at some hearing very long ago.