MacDailyNews - Where Mac news comes first

Everybody's tryin' real hard to find something wrong with Apple.

Apparently if a company makes a profit, it is wrong.

Tell that to the shareholders, idiot.

Let's analyze ISuppli's financials excluding labor, insurance, etc. How many times must we see a "profit margin" based only on wholesale component costs? Ridiculous.

Why assume this is a negative story? It's basically saying that Apple is going to continue being profitable, so buy more stock.

it is so great to see these parasites

anything to put apple in a headline

bow before zod!!!!

""ISuppli's estimates don't account for nonhardware costs, including software development, intellectual property, packaging, final assembly, and distribution."

I'm sure that can't be any more than $1 US per Nano. Right? I can't believe that iSuppli's "reports" actually get re-distributed at all.

BusinessWeek: iPod nano teardown shows ‘fat’ profit margins for Apple

Yea and the quality is slipping tremendously too. Crooked screens, faulty OS installs, cheap LCD screens on the iPod Touch and Fatty. Low quality screens and reduced (yes reduced) graphics performance on the new AL iMac's. (Lawsuit is pending on the LCD's.) Of course the glossy displays.

Apple is going after Dell all right, following right in their footsteps for poor quality. I'm half expecting my MBP battery to explode like cheap ass Dells.

Please Apple, return quality and functionality to your products.

"ISuppli's estimates don't account for nonhardware costs, including software development, intellectual property, packaging, final assembly, and distribution."

Where does Apple add value. In their hardware on in their software (user interface). By excluding software development and intellectual property, this report is excluding the things that are truly valuable to the making of the nano.

It's like building a custom house and only counting the cost of construction materials. Construction and design costs are ignored.

Not only is this report inaccurate, it's highly misleading.

APPL needs fat margins to pay for lawsuits. And it's going to happen more and more.

Pitty they don't include non-hardware costs, people are misinformed.

Stop teasing little nano!

MDN magic word: money

...and I thought that's what companies are for, to make profit.

Like hacking away at a redwood (or Redmond), take it one chop at a time. The tide is slowly turning. Soon, a couple diehard IT guys and Ballmer crouching in a closet clutching a chair will be the only Winblows users in the States.

Excuse me, did I miss something in economic 101, Its called supply and demand?

If the consumer finds value at $149.00, who cares how much it cost to build, "I mean to buy the parts" I assume Apple still pays for the assembly, testing, packaging, marketing, and on and on.....

If the component costs are going down and the ancillary costs remain the same then Apple will make more money on the same priced unit. I think that is the article's point.

However didn't Apple drop the price on the nano? Was the lowest priced unit at 149 before. I know the 1 gig Gen1 unit I bought was.

What the article doesn't menetioned is that for 200 or 149 bucks you get double the storage, video playback, bigger screen, improved interface compared to the previous models. Not too shabby.

I wonder what MS' or ANY company other than Apples profit margins are and when was the last time they were in question ?

iSupply is just jealous that their margins aren't as good. Maybe they aren't very good at what they do?

I would like to point out that while iSuppli definately has a bias here (based on previous announcements from them), this time they actually have a (small) point.

The raw BOM of a product should be about 50% on average of it's retail price. That doesn't mean that the margin is 50% as the other costs are not filled in, but that the raw cost of the materials usually comes out at about 50%.

This means that the nano fatty actually does have a tad more margin than usual. Instead of being 75.00 and 100.00 respectively, the BOM is roughly 60.00 and 80.00.

Isn't this just the iPhone rehashed? There wasn't much in that one on further investigation. Why should I think this will be any different?

4 Gb SD Card costs me... $58.85.
8 Gb SD Card costs me... can not find one yet... 120.00?

The price of this 2 " LCD has to be at least 10 bucks.
The electronics... assembly, shipping, packaging, marketing, blah blah blah --- YEAH the DUDE has missed the BOAT!

I would not higher him in any accounting DEPARTMENT!

The total cost for parts on a 2008 Mercedes-Benz C-Class, is $4,976.16. The retail cost to buy the car is $34,000. Who's getting ripped off?

Get a life Hesseldahl!

Are they using current pricing?

How long ago did Apple order the parts and what were the prices then?

If you notice by the questions, analysis can be created to justify or discredit anything and that iSuppli is using monkeys to do its research. In this way they can claim that shoddy research practices were done by inexperienced part time help.

There is a world of difference between a Mercedes Benz and an iPod. Come on! If you want people to take you seriously, then try not to make yourself look like an idiot.

Pricing on parts is much more applicable on a mass-produced unit with no moving parts or complicated engineering like the iPod.

As a sidepoint, I suspect the reason apple brought back the mirror back is because it scratches so easily. It makes some buyers want to buy a new one more frequently and it makes it more difficult to sell the old one. It would've been REALLY nice if they had kept the same surface as the current nano.

@Jay and my spin,
"I would not higher him in any accounting DEPARTMENT!"

Dude, that's "hire", not "higher"

i bought all the stuff i need for a house, but oddly enough it isn't working out for me. turns out i need all this other stuff like electricians, carpenters, plumbers....

who knew?

The new iPod nano is not fat.

It's just big boned. Now back off.

"Pricing on parts is much more applicable on a mass-produced unit with no moving parts or complicated engineering like the iPod."

really, that OS is just something they threw together in the basement and the design is practically a no brainer. there is nothing complicated and pretty much zero engineering in an iPod...

"Come on! If you want people to take you seriously, then try not to make yourself look like an idiot. "

couldn't agree more.......

@macboy2010
... "bow before zod!!!!"

That's great, I loved those scenes!

I can't believe so many posters are not getting the real story. Don't get so hung up about the author not including all of the costs. It may be true, but it is not the major issue.

Because Apple has such a dominant market share, they can afford big up front non recurring costs for R&D;and custom circuit design in order to create a low recurring cost product. This puts up a huge barrier against potential competitors with small market share. Should Microsoft come out with another model Zune, they will have to keep draining their assets just pretending to keep up.

"ISuppli's estimates don't account for nonhardware costs, including software development, intellectual property, packaging, final assembly, and distribution."
Marketing is part of "distribution".
Apple has the best profit margins in the PC world, bar none. Double-digits where the rest are happy to make single-digits. This accounting of the cost to build the nano vs the sales price suggests they are much higher, but the costs of doing business must also be paid. Several other MP3 player makers have gone out of business while the iPod line has continued to flourish - do people enjoy over-paying for their toys?

Dave - many thanks for visiting my theater-related podcast

ApplePi. Go eat apple pi

Yeah, it's so cheap and easy to make one of these little iPod nano thingies, just look at all the, ugh, well, hmm, competition, out, (cough) there. (crickets…)

You'd think by now MS would have jumped on the flash-memory-Zune bandwagon, it's so easy.

BTW, does anyone else even have an 8gig flash-memory video player? Sony? Samsung? Archos? Sansdisk?

Just asking, I don't know.

Apparently Micro$oft is making a much "Fatter" profit on Vista. Obviously, if you're only going to count the cost of the physical materials (CD, box and documentation) and compare it to its selling price, you get a "fat profit margin", meaningless but indeed "fat".

Go to a Mercedes-Benz dealership and buy all the parts you need to assemble a C-Class. I bet you you are well over $200,000.00 before you start assembly.

Then add the hours you spend assembling the car at $100 (That's cheap for a mechanic) an hour.

You've spent $250,000.00 easily and judging from your previous post, the damn thing will not run when you're done.

Synthmeister:
Sansa e280 (8GB) $249.99

http://www.technologynewsdaily.com/node/4155

Synthmeister:
Here are better details for comparison.
http://www.sandisk.com/Corporate/PressRoom/PressReleases/PressRelease.aspx?ID=3512

Hey, I have an idea:

Let's also audit the beverage industry! I pay in between $1 and $2 in any restaurant for a soda. But in fact every serve's cost is about 10 cents.

Let's go further: for the price of 3 scotchs on the rocks at any bar, I can buy my own bottle of Scotch.

Don't even get me started with sushi (I make it myself, and it's pretty good), or garments ($250 for a couple of feet of cloth?)

These people don't consider other factors:

1. Engineering
2. Design
3. Personnel
4. Research & Development
5. Marketing
... and, of course, the fact that there might be units they don't sell (yes, it might happen)

It's not ALL about the parts. A LOT of the cost goes to other places. And that's the way business works.

If they don't like the price, they should buy the parts themselves and build their own MP3 player. Oh, I forgot, they will need also to KNOW how to do it, since copying Apple's design would be stealing, right? Add 4 years of college (and the cost) to the mix.

This article is simple and pure nonsense.

MW: "how" as in "how pofitable businesses work!"

"I can buy my own bottle of Scotch."

Or a high stone wall and a good running start will end up accomplishing the same end result if you want to get real cheap.

I'm gonna wait 66 days for the price to drop!!

Ok, ok, I know. That was below the belt. hehehee.

iSupply is Bogus. Its with Microsoft. Why don't they do tear down for other products? Why only Apple products? Do they show tear down for Xbox?

@hotinplaya

"Excuse me, did I miss something in economic 101, Its called supply and demand?"

Sounds like you took the old course. The new course is appropriately callked Ekkkonomy 10.1 and is called demand and supply, i.e. "You demand what we supply." They also give an introduction to the wonderful world of FUD.

You can take the course at any Microsophmore campus.