It's not documented on a link, but Apple said their margin was 20% on it during their Q1 conference call, which would put actual cost at $200.
Probably I am skeptical, but take a loss of more than a hundred bucks per item and risk breaking the contract with Apple as a reseller?
I really doubt.
I have a vague recollection of SOME OTHER BRAND of iPOD LIKE player for around $100 in an ad within the last 2 weeks in San Jose. I too would doubt that a true iPod would be that price.
I think your friend doesn't know the difference between and iPod and an iPod LIKE device.
He/she probably calls anything that you use in place of a handkerchief "Kleenex" also even though it's another manufacturer's attempt to make Kleenex.
I think your friend doesn't know the difference between and iPod and an iPod LIKE device.
He/she probably calls anything that you use in place of a handkerchief "Kleenex" also even though it's another manufacturer's attempt to make Kleenex.
Originally posted by: straubs
Duuuuuude! Not up to date on the price of microdrives, eh?
You said it in a much nicer way than I would have. I get the impression that Apple might be sacrificing their usual margin on this device, I mean 2GB microdrives are still around $150-$170. There are so many costs that have to paid such as development, manufacturing, packaging, accessories, transportation, distributor margin, retail margin etc. I guess they are getting those Hitachi drives really cheap, hopefully we'll be able to 4GB CF drives for around $130 soon.
Yes, Fry's does on occasion sell things below cost, but they can't do that with Apple products. Why? It's in the contract Fry's (and everyone else who sells Apple products) has with Apple. That's why you won't ever find Apple products significantly cheaper than what Apple themselves sells them for. Take a look around and see if you can find an iPod much less than what Apple's MSRP is.
That's one reason why places such as MacMall, ClubMac, Mac Zone, and Mac Connection offer free products (after rebates) along with what they're selling. It's used to entice customers to shop with them rather than directly with Apple. It's used to give the impression that their offer is better even though the Apple product they're selling is pretty much the same price as what Apple has it for, and just about everyone else.
For example, take a look at the deal MacMall is running: They're selling the iPod mini for $244 and also offering Labtec speakers for free (after rebate). Same with the regular iPod. $294 for 15GB iPod, plus free (after rebate) Labtec speakers and Netalog iPod Clear Jam Jacket Carrying Case.
iPod's don't cost $50 to make. And you can't sell iPods for any price you want. unless of course, you're selling them on eBay. All authorized Apple resellers must abide by the contract they signed with Apple which stipulates that they can't sell an Apple product below a certain price, unless of course, it's been discontinued. Failure to follow the rules will result in Apple pulling their contract.
See my previous post (above) for explanation.
It's more than unconfirmed. It's dead. iPod mini's haven't even been released yet. They aren't scheduled to be released in the U.S. until sometime in early to mid-February. And worldwide in April. The guy probably got the mini mixed up with something else.
People people. the price that WE pay for parts (micro drives, LCD screens, etc) are NOT, in ANY way, what companies pay for IN BULK. I laff at people if they really think apples pays $150 for a micro drive.. try 50-75 max...why? Because they buy in 1000 unit quanties. hitatchi makes a profit still (there is not $50 in material/manufactuing costs in there), and apple sells to make a profit...
Anyone been to Fry's yet to confirm this? I would go, but it's 25 miles away and my car is in the shop.
Instead of all this pointless arguing about Apple's margins and what not...
al
Instead of all this pointless arguing about Apple's margins and what not...
al
c'mon, this is bullsh!t. $249 msrp and fry's has it for $100? and it's new? no. just let this thread die.
Dude, did you read the posts above? People at Creative are saying that they buy the drives for over $100. And they are buying more that 1000 at a time. From people I know in the industry, Apple is getting the drives for about $150 or so.
um no.
my father works at an oem that does alot of the emachines/compaq/ and hp stuff. i used to work there for a while too.
their prices are not that much better. maybe 10% better than ours at normal gray market oem prices. i'd say our hotdeal prices are better than their 10000 unit prices half the time, because the people selling us hot deal stuff are usually losing money.
a 15" LCD let say still costs them about $225 to manufacture. a 200 gb maxtor hard drive is still around $140-150 . etc.
they do get the CPU price cut ahead of us, which is why oem gray market stuff has the cpus early. but the price is basically whatever is quoted as 10k units, with possibly a very bulk or special rebate incentive to them.
microdrives are not typically sold to random consumers anyways,. especially 4 gb ones. so the oems are the only ones buying them. why would say hitachi give apple a huge discount. its not like hitachi has many competitors in the microdrive work, and why would they care if apple can make $150 per unit. hitachi wants to make as much money as it can also.
so whoever said the quote above, please think before you post.
oem vs. apple is different.
Apple would not be buying the drives at a 20% margin discount. They don't buy the units in the 1000's, it's an exclusive contract between them and Hitachi and probably struck a deal for the whole batch of mini-ipods run they are going to make. They have manufacturers for all the items that comprise the ipod. The price they get on the microdrive is MUCH cheaper than what the OEM people get them at because they are not in the business of reselling stuff.
you are talking about two very different beasts here.
It's very similar to other industries where the manufacturer's cost is beyond your belief.
Take for example Oakley selling $300 sunglasses. The employee gets it at $70, which is the probably the cheapest wholesale price to retailers. The cost for oakley to make the sunglasses, market it, etc...? probably less than $70.
If the ipod is selling for $250 retail, then the retail outlet (like fry's, bestbuy, etc...) are probably getting it around $100-150. It's not viable for them to pay more because their profit margin is really low for something that their inventory cost is so high. And if apple does get a 20% profit on them, it probably would cost them $80-100 to make.
I might not buy this deal... but the economics behind manufacturer-wholesaler-retailer, usually dictates a pretty hefty margin of profit of 40-60% from the manufacturer to the retailer to your hands.
Apple would not be buying the drives at a 20% margin discount. They don't buy the units in the 1000's, it's an exclusive contract between them and Hitachi and probably struck a deal for the whole batch of mini-ipods run they are going to make. They have manufacturers for all the items that comprise the ipod. The price they get on the microdrive is MUCH cheaper than what the OEM people get them at because they are not in the business of reselling stuff.
you are talking about two very different beasts here.
It's very similar to other industries where the manufacturer's cost is beyond your belief.
Take for example Oakley selling $300 sunglasses. The employee gets it at $70, which is the probably the cheapest wholesale price to retailers. The cost for oakley to make the sunglasses, market it, etc...? probably less than $70.
If the ipod is selling for $250 retail, then the retail outlet (like fry's, bestbuy, etc...) are probably getting it around $100-150. It's not viable for them to pay more because their profit margin is really low for something that their inventory cost is so high. And if apple does get a 20% profit on them, it probably would cost them $80-100 to make.
I might not buy this deal... but the economics behind manufacturer-wholesaler-retailer, usually dictates a pretty hefty margin of profit of 40-60% from the manufacturer to the retailer to your hands.
BTW, about 2-3 years ago, Best Buy had a profit margin of over $2K on a 50inch TV that they sold for approximately $5k. Friend and employee purchased it at cost to best buy for $2.8k
TV != ipod
Some items are high-margin items, and some are low-margin items. That's just how retail works.
Thats wonderful. However, we are talking about microdrives, not big screen TVs. Did your friend tell you the profit margins on speakers? How about any computer cable? Thats where they make loads of money. But thats not what we are talking about.
And companies CAN NOT sell them at any sort of significant price difference, unless they are discontinued, or if they exit their contract and are getting rid of their inventory (as what happened when Target dropped the iPod for a while about 6 months ago). If they sell them at a significantly reduced cost, Apple pulls their product, they are VERY anal about their pricing. Its the way they are. Name one retailer that has sold it 5% lower than the MSRP, because you can't, unless its a discontinued product or they are eliminating inventory.
TRENDING THREADS
-
Discussion Zen 5 Speculation (EPYC Turin and Strix Point/Granite Ridge - Ryzen 9000)- Started by DisEnchantment
- Replies: 25K
-
Discussion Intel Meteor, Arrow, Lunar & Panther Lakes + WCL Discussion Threads
- Started by Tigerick
- Replies: 23K
-
Discussion Intel current and future Lakes & Rapids thread- Started by TheF34RChannel
- Replies: 23K
-
-
Facebook
Twitter