iPhone 5 costs $207 to manufacture

[Tom]

Nexus 7 is less but it isn't too far off from iPhone 5. Remember Google is giving away $25 in Google Playstore credit and $10 in Google Wallet credit. That's $35 extra. I bet 8 gb Nexus 7 is somewhere between $150-175.

iPhone 5 has no special hardware. What makes you think iPhone 5 has expensive build?

This pricing difference shows how harmful subsidies are. If not for the carrier subsidies, retail phone prices would be similar to tablets.

The Wallet credit has nothing to do with the cost of making the Nexus 7. Its a promotion to promote Google Wallet on lots of devices. And it doesn't cost Google $10 per device to offer it.

The Play credit also has nothing to do with the cost to make a Nexus 7. Its a limited time offer that is offset by some profit margin and also doesn't cost Google $25 per device to offer it.

The Nexus 7 has a couple of bits that cost a little more than the components in a $130 Android tablet. And its missing some bits that a $130 tablet does have.

Its also shoddily designed and built, at least compared to a top of the line cell phone. There is more engineering and manufacturing cost in a small device than there is in a medium sized device, for example.

 

[ITHURTSWHENIP]

No way a Nexus 7 costs $199 to produce if an iphone 5 costs $207.

Apple could probably manufacture Nexus 7 for a lot less than 199. Their insane supply chain allows them margins few other companies could match (maybe Samsung)

 

[vi edit]

Can't really compare phones to tablets. The R&D and costs and work that go to into the compatibility and testing of the radios in them, antennas, ect plus the much smaller footprint to cram the same amount of hardware is a much more difficult task. Those radios are second only to the screens in cost that go into the devices.

I'm no expert, but I'm pretty sure there's a hell of a lot more behind the scenes cost in dealing with devices that need to go through FCC approval for radiation limits than a simple wifi device.

 

[ponyo]

The Wallet credit has nothing to do with the cost of making the Nexus 7. Its a promotion to promote Google Wallet on lots of devices. And it doesn't cost Google $10 per device to offer it.

The Play credit also has nothing to do with the cost to make a Nexus 7. Its a limited time offer that is offset by some profit margin and also doesn't cost Google $25 per device to offer it.

The Nexus 7 has a couple of bits that cost a little more than the components in a $130 Android tablet. And its missing some bits that a $130 tablet does have.

Its also shoddily designed and built, at least compared to a top of the line cell phone. There is more engineering and manufacturing cost in a small device than there is in a medium sized device, for example.

I only mentioned the credits because it effects Google's bottom line.

I don't know why you mention build quality. Materials are already chosen and its price is what it is.

People like to say it costs more to manufacture small things. While that's true in extreme cases, it's not true when it comes to small devices such as phones. Smaller screens are cheaper to make than larger screens. That's a fact. Are iPods more expensive to make than iPads? Must be since you say there's more manufacturing costs for smaller items. Must be why 32" 1080p TVs are more expensive than 80" 1080p TVs too. Oh wait.

 

[vi edit]

People like to say it costs more to manufacture small things. While that's true in extreme cases, it's not true when it comes to small devices such as phones. Smaller screens are cheaper to make than larger screens. That's a fact. Are iPods more expensive to make than iPads? Must be since you say there's more manufacturing costs for smaller items. Must be why 32" 1080p TVs are more expensive than 80" 1080p TVs too. Oh wait.

iPods don't have 3G/4G radios in them. Phones do. Phones have bigger batteries than iPods do. That takes up space that is already at a premium.

 

[Tom]

I only mentioned the credits because it effects Google's bottom line.

I don't know why you mention build quality. Materials are already chosen and its price is what it is.

People like to say it costs more to manufacture small things. While that's true in extreme cases, it's not true when it comes to small devices such as phones. Smaller screens are cheaper to make than larger screens. That's a fact. Are iPods more expensive to make than iPads? Must be since you say there's more manufacturing costs for smaller items. Must be why 32" 1080p TVs are more expensive than 80" 1080p TVs too. Oh wait.

there's more to a screen than its size. I wouldn't be surprised if the screen in the ip5 costs more than the screen in the Nexus 7.

 

[VashHT]

there's more to a screen than its size. I wouldn't be surprised if the screen in the ip5 costs more than the screen in the Nexus 7.

Yeah that's not true apparently: http://www.isuppli.com/Teardowns/News/pages/Low-End-Google-Nexus-7-Carries-$157-BOM-Teardown-Reveals.aspx

The touchscreen+display cost more in the nexus 7.

 

[krumme]

all Apple needed was a 10 cent sticker with the number "5" on it


http://www.youtube.com/watch?v=rdIWKytq_q4

This is the most wonderfull visual representation of why Apple shareprice is so high, and why this company can earn so much.

I work for a company with the industry leading brand of its business, and it does wonders for the profit. But man, compared to Apple....if one could have that brand imagine. Whatever you made, you could sell it. Ofcourse a brand so strong, doesnt come without results. But it shows the value of having a strategy that strengthen your brand on the long run, be it product strategy or add strategy building the brand.

 

[ChAoTiCpInOy]

First of all, the iPhone 5 hasn't even come out, so these numbers really don't mean anything. Second of all, it also will not account for the deals that Apple makes to get lower prices on components. Third of all, Apple's margins on devices is around ~40%, however there is more to a device than the cost of its components.

So basically, if I say that I think they make a certain amount on each device, I am as credible as the analyst who says the same thing considering both of us haven't had access to the device.

 

[KLin]

That's just to manufacture the device. Don't forget the sales/marketing costs.

 

[corkyg]

G&A (general and administrative) costs include all overhead, sales, marketing, utilities, etc., etc., and in Apple's case, a whole herd of lawyers.

 

[sixone]

That's just to manufacture the device. Don't forget the sales/marketing costs.

And R&D, too.

 

[Deeko]

DAMNNNN

What do you keep? 1080p movies and videos with a ton of pictures?
I'm only using 8

My music collection alone is about 20GB. No, I certainly don't need all of that on my device at a time, but its a lot easier to just say "sync everything automatically" rather than having to manually pick and choose what I want.

 

[kaerflog]

Is this really news ??
Every iPhone has been around ~$200 to produce and sold for $649 every year.

 

[T_Yamamoto]

Few games, few hundred pictures, some video clips, ebooks, audio books, few dozen apps, some apps have collections of HD videos I chose to download to improve usability, etc.

Oh

I use my phone as my mp3 player and that alone takes up 10 gigs. Apps are also getting up there too so if you install a lot of them it'll fill up.

I have an iPod nano

 

[Suspicious-Teach8788]

I've got not problem paying $600 for a phone when it has the latest available tech at time of release. That said, this is not it! :whiste:

I think there's this misconception of a phone having to have the latest CPUs and everything. Look at Windows Phones and stuff.

Furthermore what's not so *latest tech* about the iPhone 5? It has a revamped CPU that's the fastest out there right now for a dual core machine. We can go on and on.

You're right, you can always pick better. The SGS3 could've launched better. So could the Motorola phones, etc. You can always say they can do better. The Galaxy Nexus launched with old tech at the time.

The point is phones have been selling for a long time at high prices. This isn't the same as build your own computer where you can swap CPUs and graphics cards and put in anything you like.

EVen if individual components in the iPhone don't satisfy you, it doesn't mean it's not top of the line. Until anyone out there can just build an iPhone with a quad A15 and a 5" retina screen, Apple has the best iPhone out there. You make it seem like it's some easy thing for people to put in the best hardware features possible. Isn't that what every Asian company is doing with Android? Why is it only Samsung and HTC come out ahead as the leaders in Android?

It's about having the best possible finished good. It's a package. Stop treating it like a computer where you can swap out goods here and there. Perhaps the laptop market is a better model.

 

[tvdang7]

If batteries are so cheap why doesn't HTC and samsung just put a 2500mah+ battery in all their phones. why are there so many different sizes of batteries in all variations of their phones............................I mean every phone could be a "MAXX" phone.

 

[Phynaz]

Industry leading margins

Yep! That's why multiple companies in multiple industries are trying very, very hard to be just like Apple.

Some should try harder to be just like them, rather than trying to copy them outright though.

 

[Suspicious-Teach8788]

If batteries are so cheap why doesn't HTC and samsung just put a 2500mah+ battery in all their phones. why are there so many different sizes of batteries in all variations of their phones............................I mean every phone could be a "MAXX" phone.

because people are obsessed with z-height. As a result the iPhone could've had a much larger battery if they stuck to a 8mm design or something, which to most is still pretty thin. Even 8.5mm is acceptable, and certainly understanding if you managed to give a 50% boost to battery life.

 

[vi edit]

If batteries are so cheap why doesn't HTC and samsung just put a 2500mah+ battery in all their phones. why are there so many different sizes of batteries in all variations of their phones............................I mean every phone could be a "MAXX" phone.

It's one of the heaviest and largest single components in the device. The MAXX isn't exactly a small phone. There's a fine line they balance between form and function. I don't think it has anything to do on cost. Although with the number of iPhones, iPods, iPads and Macbooks that Apple ships I'm sure they have one of the lowest supply costs of any company in the mobile business.