Wi-fi only Xoom available for preorder $599

[Bateluer]

The Nook Color is a loss leader AND you have to hack it.

Try again.

You have a link to back this statement up? I don't see an iFixit teardown of it with a cost analysis.

Also, B&N designed the nook color as an e-reader, which it does a very good job of. The fact that its easy to hack to make into a more full features tablet is a bonus.

 

[zerocool84]

BN loses money on each Nook sold in the hopes that it makes up money via book sales.

This isn't rocket science.

To you it's obviously rocket science since any strategy that isn't Apple's doesn't make sense to you. If it makes them money then that's a good strategy. Video game systems have always been loss leaders when they first come out but they make it up in other ways. Android doesn't make any money off the handsets sold but they seem to be making money off of it. Just because someone doesn't make money the Apple way doesn't mean they aren't making tons of money.

 

[smartpatrol]

I perfectly agree that the Xoom is over priced, but so is the iPad 2. These tablets ALL need to be priced ~300 or less, netbook level pricing. Right now, they are all basically toys. If you want to do real work, you spend that 500 on an actual laptop.

The iPad 2 is selling perfectly well at $500. I personally have no use for one, and I somewhat agree that they are just a toy, but obviously there are PLENTY of people willing to pay $500 for it. They're sold out everywhere.

Besides, Apple has absolutely no desire to sell a $300 iPad, nor a $400 tower, nor a $500 laptop. Their whole business model is centered around avoiding the low-end, where profit margins are razor-thin, and where they'd be making lower-quality hardware that lessens their brand reputation. They'd rather leave the "race to the bottom" segment of the market to someone else.

No offense, but for the last decade, the Internet has been abuzz with geeks ranting and raving about everything Apple "should" be doing. Every new product has been crapped on by PC fans, computer geeks, Linux zealots, etc. And you know what? They've been absolutely dead wrong. I wish I had invested my life savings in Apple stock 12 years ago.

 

[Ns1]

The iPad 2 is selling perfectly well at $500. I personally have no use for one, and I somewhat agree that they are just a toy, but obviously there are PLENTY of people willing to pay $500 for it. They're sold out everywhere.

Besides, Apple has absolutely no desire to sell a $300 iPad, nor a $400 tower, nor a $500 laptop. Their whole business model is centered around avoiding the low-end, where profit margins are razor-thin, and where they'd be making lower-quality hardware that lessens their brand reputation. They'd rather leave the "race to the bottom" segment of the market to someone else.

No offense, but for the last decade, the Internet has been abuzz with geeks ranting and raving about everything Apple "should" be doing. Every new product has been crapped on by PC fans, computer geeks, Linux zealots, etc. And you know what? They've been absolutely dead wrong. I wish I had invested my life savings in Apple stock 12 years ago.

this.

the apple business model is to sell 1 unit @ 50, not 5 units @ 10.

 

[JS80]

The iPad 2 is selling perfectly well at $500. I personally have no use for one, and I somewhat agree that they are just a toy, but obviously there are PLENTY of people willing to pay $500 for it. They're sold out everywhere.

Besides, Apple has absolutely no desire to sell a $300 iPad, nor a $400 tower, nor a $500 laptop. Their whole business model is centered around avoiding the low-end, where profit margins are razor-thin, and where they'd be making lower-quality hardware that lessens their brand reputation. They'd rather leave the "race to the bottom" segment of the market to someone else.

No offense, but for the last decade, the Internet has been abuzz with geeks ranting and raving about everything Apple "should" be doing. Every new product has been crapped on by PC fans, computer geeks, Linux zealots, etc. And you know what? They've been absolutely dead wrong. I wish I had invested my life savings in Apple stock 12 years ago.

They're not necessarily wrong. One could argue if they did the "right things" Android would not have taken market share and AAPL stock would be double what it is now.

TBH they were a shitty company before the iPhone. Because of their strategy they came close to going out of business a few times. The fact that the Apple closed strategy happened to work for iPhone shows more luck than anything else.

Regardless, who the fuck wants a Xoom for $599

 

[Patranus]

To you it's obviously rocket science since any strategy that isn't Apple's doesn't make sense to you. If it makes them money then that's a good strategy. Video game systems have always been loss leaders when they first come out but they make it up in other ways. Android doesn't make any money off the handsets sold but they seem to be making money off of it. Just because someone doesn't make money the Apple way doesn't mean they aren't making tons of money.

Jesus fucking Christ.

BN sells the Nook with a 0% margin. They make up for that by selling e-books which have very high margins. Amazon does the EXACT SAME THING with the Kindle.

They are selling a device designed specifically to generate them down stream revenue.

Now, a tablet manufacturer cannot sell their tablet for 0% margin because they have ZERO down stream revenue.

Since we know that the cost for the hardware alone to manufacturer these devices are $300 there will not be a tablet available for $300.

It has nothing to do with how Apple makes money or how Android makes money. It is common sense retail.

If Samsung released a tablet for $300 that cost them $300 to make, how exactly does Samsung make money?

Do they have a source of down stream revenue like BN has with the Nook? Nope.

So how do you expect the company to pay its employees or develop future products?

There is a reason why every mainstream tablet has a ~50% margin attached to it.

The point has nothing to do with Android specifically simply the reason why you won't see any mainstream sub $300 tablets unless manufacturers can cut their material costs by 50%. That isn't happening any time soon.

 

[Pliablemoose]

Apple is supposedly considering a cheap iPhone, something for developing markets, essentially an app store delivery device. Razor thin profit margins (for Apple), but making cash on Apps and increasing marketshare in general.

 

[Bateluer]

Jesus fucking Christ.

BN sells the Nook with a 0% margin. They make up for that by selling e-books which have very high margins. Amazon does the EXACT SAME THING with the Kindle.

Once again, link?

I was unable to locate one specifically for the nook color, but ifixit teardowns and other sites for the Droid X and D2, which use the same OMAP362x CPU and SGX530 GPU only cost a little less than 180. And that was with a 35 dollar 16GB SD card, which the nook color does not ship with. The larger screen(and higher res) of the NC likely adds some cost to the total, but I don't think its unreasonable to estimate a manufacturing cost of less than 200 dollars. Since their pricing it at 250, thats a profit per NC sold.

 

[zerocool84]

Jesus fucking Christ.

BN sells the Nook with a 0% margin. They make up for that by selling e-books which have very high margins. Amazon does the EXACT SAME THING with the Kindle.

They are selling a device designed specifically to generate them down stream revenue.

Now, a tablet manufacturer cannot sell their tablet for 0% margin because they have ZERO down stream revenue.

Since we know that the cost for the hardware alone to manufacturer these devices are $300 there will not be a tablet available for $300.

It has nothing to do with how Apple makes money or how Android makes money. It is common sense retail.

If Samsung released a tablet for $300 that cost them $300 to make, how exactly does Samsung make money?

Do they have a source of down stream revenue like BN has with the Nook? Nope.

So how do you expect the company to pay its employees or develop future products?

There is a reason why every mainstream tablet has a ~50% margin attached to it.

The point has nothing to do with Android specifically simply the reason why you won't see any mainstream sub $300 tablets unless manufacturers can cut their material costs by 50%. That isn't happening any time soon.

You bring it up in practically every thread you post in, no one makes the margins per product Apple does and you always say that means they suck. There are other ways to make money. I don't know why it's hard for you to understand. They seem to be doing fine making small margins on the Nook and Kindle. Handset manufacturers seem to be doing fine making their small margins on handsets as well. Just because they're not making Apple margins doesn't mean they aren't still making good money. If they weren't they wouldn't have come out of the recession. What makes you think tablets are any different? For some reason you always think if they're not making Apple margins they are not making money or can't sell something for cheaper.

 

[smartpatrol]

They're not necessarily wrong. One could argue if they did the "right things" Android would not have taken market share and AAPL stock would be double what it is now.

http://www.google.com/finance?q=apple

Zoom out to the mid-90s. Then tell me that Apple didn't do the "right things".

TBH they were a shitty company before the iPhone. Because of their strategy they came close to going out of business a few times. The fact that the Apple closed strategy happened to work for iPhone shows more luck than anything else.

They were a shitty company before the iPhone? You mean when they completely dominated the MP3 player market with the iPod and had the hottest selling gadget several years in a row? Or maybe they were a shitty company when they passed up Best Buy and Walmart to become the world's biggest music retailer?

Give me a break. Apple have made some amazingly smart business moves over the last decade. They are on fire, and the naysayers have been dead wrong. Hate them if you want, but to suggest that they somehow made the wrong decisions is just laughable.

 

[MagickMan]

Once again, link?

I was unable to locate one specifically for the nook color, but ifixit teardowns and other sites for the Droid X and D2, which use the same OMAP362x CPU and SGX530 GPU only cost a little less than 180. And that was with a 35 dollar 16GB SD card, which the nook color does not ship with. The larger screen(and higher res) of the NC likely adds some cost to the total, but I don't think its unreasonable to estimate a manufacturing cost of less than 200 dollars. Since their pricing it at 250, thats a profit per NC sold.

I see the same thing, the manufacturing breakdown looks to be ~$190 for B&N based on the Ars guys, that's $60 for each one sold, minus their shipping and marketing expenses. Worst case scenario, they're making $40 each. While that's not stellar, it's still 16%.

 

[Patranus]

You bring it up in practically every thread you post in, no one makes the margins per product Apple does and you always say that means they suck. There are other ways to make money. I don't know why it's hard for you to understand. They seem to be doing fine making small margins on the Nook and Kindle. Handset manufacturers seem to be doing fine making their small margins on handsets as well. Just because they're not making Apple margins doesn't mean they aren't still making good money. If they weren't they wouldn't have come out of the recession. What makes you think tablets are any different? For some reason you always think if they're not making Apple margins they are not making money or can't sell something for cheaper.

What are you talking about?

Every other company makes the margins Apple makes on hardware.

That is why you will never see a mainstream sub $300 tablet.

Both the Xoom and the Galaxy have the same margins as the iPad of roughly 50%.

Yes, Amazon is doing fine because people buy the Kindle to read thus they buy books form the *wait for it* Kindle Book Store. The Kindle essentially locks the user into a down stream revenue source called the Kindle Book Store.

If you are going to sell at tablet at or below manufacturing costs you need to make up R&D, advertising, ect in other ways. Downstream revenue sources is how you do that.

If you are like every other manufacturer on the planet you don't have your product locking into down stream revenue sources so you have to make your profit up front.

I really don't understand why these simple concepts are so hard for you to grasp.

 

[theeedude]

What are you talking about?

Every other company makes the margins Apple makes on hardware.

That is why you will never see a mainstream sub $300 tablet.

Both the Xoom and the Galaxy have the same margins as the iPad of roughly 50%.

Yes, Amazon is doing fine because people buy the Kindle to read thus they buy books form the *wait for it* Kindle Book Store. The Kindle essentially locks the user into a down stream revenue source called the Kindle Book Store.

If you are going to sell at tablet at or below manufacturing costs you need to make up R&D, advertising, ect in other ways. Downstream revenue sources is how you do that.

If you are like every other manufacturer on the planet you don't have your product locking into down stream revenue sources so you have to make your profit up front.

I really don't understand why these simple concepts are so hard for you to grasp.

Sorry, but it's just asinine to say we'll never see a sub $300 mainstream tablet. It simply reflects a misunderstanding of electronics business. An Android tablet is basically an LCD panel, a battery, an SOC, memory, and a camera. All of those components are commodities. Aside from perhaps the battery, they are commodities in a very competitive market subject to very rapid price declines as volumes and yields ramp up.
It's like saying 5 years ago we'll never see sub $1000 big screen LCD TVs, or saying 2 years ago we'll never see sub $200 smartphones. It's simply not how electronics business works.

 

[Cruisin1]

Wifi xoom is 589.99 and available for pre-order at costco.com right now. Comes with gel case too... Very interesting.

 

[Patranus]

Sorry, but it's just asinine to say we'll never see a sub $300 mainstream tablet. It simply reflects a misunderstanding of electronics business. An Android tablet is basically an LCD panel, a battery, an SOC, memory, and a camera. All of those components are commodities. Aside from perhaps the battery, they are commodities in a very competitive market subject to very rapid price declines as volumes and yields ramp up.
It's like saying 5 years ago we'll never see sub $1000 big screen LCD TVs, or saying 2 years ago we'll never see sub $200 smartphones. It's simply not how electronics business works.

I never said never.
I am saying why you don't see them now and wont for some time.

The original comments was regarding a manufacturer releasing one now not at some non specific point in the future.

 

[Suspicious-Teach8788]

Sorry, but it's just asinine to say we'll never see a sub $300 mainstream tablet. It simply reflects a misunderstanding of electronics business. An Android tablet is basically an LCD panel, a battery, an SOC, memory, and a camera. All of those components are commodities. Aside from perhaps the battery, they are commodities in a very competitive market subject to very rapid price declines as volumes and yields ramp up.
It's like saying 5 years ago we'll never see sub $1000 big screen LCD TVs, or saying 2 years ago we'll never see sub $200 smartphones. It's simply not how electronics business works.

Uhhh. Sub $200 smartphones is because of subsidies. A good feature phone in 2005 cost me $430 or so. They weren't top notch smartphone/PDAs back then, but that's what a pretty good phone costs today. A top notch phone costs close to $600.

The reason we have sub $200 phones is to encourage people to jump on, and this was accomplished by jacking up ETFs, limiting upgrade timespan, having mandatory data charges, etc.

Cell phones are about the same price as they were years ago. MP3 players are still about the same price. Apple has maybe come down on the iPod a bit from the $299 price point to the $229 point with its iPod Touch, but the tablet isn't really something that will plummet in price.

LCDTVs were just absolutely new technology. It was a new wave of TVs. Tablets really is just something inbetween a phone and a laptop. The pricing is already there. It's not going to slide unless the phone prices plummet like a rock or laptop prices continue to slide more. Those devices have plateaued.

So sure we may see $300 tablets soon, but don't expect the iPad of 5 years from now to sell at $200. The only way we'll see that is if there are massive subsidies, but we're talking Wifi only.

 

[purbeast0]

I never said never.

ummm ... from your post above ...

What are you talking about?

Every other company makes the margins Apple makes on hardware.

That is why you will never see a mainstream sub $300 tablet.

just sayin...

 

[Phokus]

That is why you will never see a mainstream sub $300 tablet.

Are you crazy? There's going to be lots of different market segments/price points for tablets and the hardware is going to get cheaper. We're getting to the point that faster CPU's don't really mean much and not EVERY hardware manufacturer needs to build tablets with the fastest cpu/gpu's. You can get android phones anywhere from free to $250 subsidized. There's no reason why tablets couldn't have the same price flexibility/choice in cheaper or more expensive hardware. Apple, on the other hand, doesn't have that much flexibility.

 

[SunnyD]

Jesus fucking Christ.

BN sells the Nook with a 0% margin. They make up for that by selling e-books which have very high margins. Amazon does the EXACT SAME THING with the Kindle.

Lol. A company like B&N can't afford to sell something like that in volume at a loss. As Bateluer has already pointed out, margin might be low, but not >=0% low.

On the other hand, Apple's roughly ~100%+ margin (depending on model) is laughable.

That said it's going to be tough sell for Moto. Early benchmark and tests show iPad destroying Tegra2. Not too many people are going to pay more for inferior hardware.

Yes, because everybody buys a piece of hardware just to run benchmarks. Seriously?

 

[zerocool84]

Yes, because everybody buys a piece of hardware just to run benchmarks. Seriously?

All of a sudden specs matter.

 

[Ns1]

All of a sudden specs matter.

touche

 

[theeedude]

Uhhh. Sub $200 smartphones is because of subsidies. A good feature phone in 2005 cost me $430 or so. They weren't top notch smartphone/PDAs back then, but that's what a pretty good phone costs today. A top notch phone costs close to $600.

The reason we have sub $200 phones is to encourage people to jump on, and this was accomplished by jacking up ETFs, limiting upgrade timespan, having mandatory data charges, etc.

Cell phones are about the same price as they were years ago. MP3 players are still about the same price. Apple has maybe come down on the iPod a bit from the $299 price point to the $229 point with its iPod Touch, but the tablet isn't really something that will plummet in price.

LCDTVs were just absolutely new technology. It was a new wave of TVs. Tablets really is just something inbetween a phone and a laptop. The pricing is already there. It's not going to slide unless the phone prices plummet like a rock or laptop prices continue to slide more. Those devices have plateaued.

So sure we may see $300 tablets soon, but don't expect the iPad of 5 years from now to sell at $200. The only way we'll see that is if there are massive subsidies, but we're talking Wifi only.

Optimus V is $109, no contract.
Who cares what iPad of 5 years from now sells for? iPad is not going to be mainstream tablet, just like MacBook Air is not mainstream netbook, it's going to be a premium product.
5 years from now, $200 is going to be selling price for a mainstream Android tablet.

 

[Ns1]

Optimus V is $109, no contract.
Who cares what iPad of 5 years from now sells for? iPad is not going to be mainstream tablet, just like MacBook Air is not mainstream netbook, it's going to be a premium product.
5 years from now, $200 is going to be selling price for a mainstream Android tablet.

green for you.

 

[Pliablemoose]

Optimus V is $109, no contract.
Who cares what iPad of 5 years from now sells for? iPad is not going to be mainstream tablet, just like MacBook Air is not mainstream netbook, it's going to be a premium product.
5 years from now, $200 is going to be selling price for a mainstream Android tablet.

I'm not so sure the iPad won't be a mainstream tablet in a couple of years

 

[theeedude]

I'm not so sure the iPad won't be a mainstream tablet in a couple of years

If they get price down into $300 range, maybe. The whole $500+ pricing is not going to be sustainable in the mainstream segment in 5 years.