New math: Apple spends $23 more than Amazon to build its "mini" tablet, but charges $130 more
posted by Alan F. / Nov 05, 2012, 11:47 AM
You really can't compare the Microsoft Surface with its larger screen to the Amazon Kindle Fire HD. But we can compare the return on the investment in parts and the $165 that it takes to build the Android powered tablet provides very little return if any for the online retailer, who sells them for $199. After computing research and marketing costs, you have to figure that Amazon continues to lose on each unit sold. But here is the difference. As we pointed out more than a year ago, Amazon makes its money by selling Kindle Fire users content, apps and storage. Microsoft wants to make its money on the tablet since it doesn't have the content to sell like Amazon does. After selling content, apps and storage to Amazon Kindle Fire HD users, it is estimated that Amazon makes a $100 profit on each tablet sold which is a pretty decent return on a $199.99 device, although not as high as Microsoft's margin.
Apple spends $188 to build the Apple iPad mini. One way to look at this is that Apple spends $23 more to build the iPad mini than Amazon does to build the Kindle Fire HD, but sells its tablet for $130 more. But that only serves to highlight the difference in the approach taken by the two companies. Amazon wants to get as many tablets into customers hands as possible so it can sell them all of the extras that it profits from selling. Apple, like Microsoft, wants to profit from the actual sale of the device.
Without knowing research and marketing costs or tax rates, we can't compute net profit margins, but based on the tear-down costs and retail pricing, Microsoft's return on its investment to produce its tablet starts at 84%. If Amazon does make $100 selling content, apps and storage, its return is 67% while Apple's figure is 75%. As juicy as it sounds, Apple has already said that the profit margin for the Apple iPad mini is less than the company receives for its other products.
None of the three manufacturers is actually giving away something for nothing. Amazon isn't in business to lose money, so you know that their business plan must be working for them. Microsoft and Apple are more traditional in their approach, which is to sell their tablets as high as possible and profit from the difference it costs the firms to produce them.
It's better to pay more for higher quality
posted on Nov 05, 2012, 11:49 AM 3
Posts: 1482; Member since: Sep 30, 2009
paying more doesnt mean you get better quality. It just means apple is making more money
posted on Nov 05, 2012, 11:51 AM 41
Posts: 4851; Member since: Apr 13, 2012
Why wouldnt they be satisfied with there Half-Baked Restrictead OS, along with a Apple logo stampet on a cheap shatering glass and everyone posing with there iPhone, not caring or botherd what good for nothing useless midrange product. Yea no wonder theres a product once a year, try buying a new phone every 6 months if your that well of. My foot same booring app launcher for 5 years with no evolution, still following Linux footsteps.
posted on Nov 05, 2012, 3:01 PM 10
Posts: 71; Member since: Oct 13, 2011
If you had stopped with the first sentence, you would have been just fine. At the end of the day, a product that the user purchasing is satisfied with is a legitimately good product. Period the end. It's when you start getting into "unmatched ecosystem" and "premium materials" that you get so downranked. You really shouldn't have written those two lines. Particularly when there ARE ecosystems out there that match iOS. Especially when you don't understand the difference between cheap plastic (what that case around your iPhone is made out of) and high grade polycarbonate material (what the battery backing for the GS3 is made from). Case in point - when I drop my Galaxy on the ground, it doesn't have PAINT chipping away from it's back over my mistake.
posted on Nov 05, 2012, 9:39 PM 0
Posts: 685; Member since: Nov 23, 2010
Copy is such a hypocritical word to defend Apple. That's like saying you, Mxyzptlk, telling me, p0rkguy, to go suck a d*ck when you already have one in your mouth. I mean how do you even say that? Does that even make sense to you? Also, neutral words would be to combining for the better, not stealing. Let's say Apple combined things and made better, why can't other companies do it now? Do you not want better? I mean sure back in the days Power Rangers was awesome, but now there's better. Are you going to disagree with that?
posted on Nov 05, 2012, 4:56 PM 4
Posts: 196; Member since: Aug 13, 2012
I'm happy to pay more for better quality - when the product costs more to make because of it. I'm not happy at paying a lot more than it costs to make just to line a company's pocket. In this instance quality doesn't come into it. This article is not about quality. It's about price difference between the cost to make and selling cost.
posted on Nov 05, 2012, 11:54 AM 16
Posts: 1236; Member since: Sep 26, 2012
and what about the less fortunate? are you saying people who cant pay premium price dont deserve to use a common feature like online services? Premium price is good for premium features...in today's day and age neither a tablet nor do basic online services qualify as premium buddy! And what about socio-economic responsibilities of a tech giant like Apple? on one side it says it is launching an education focussed product llike ipad mini yet is charging students a helluva lot more than what they pay for kindle, nook or nexus 7! Pure capitalistic bureaucracy!
posted on Nov 05, 2012, 12:33 PM 7
Posts: 1236; Member since: Sep 26, 2012
dont really need a welcome...i am quite familiar with the place :) I am not asking for anyone to become Mother Teresa but all I am saying is people shouldnt just snuggle up in their own comfy bubble and forget about others. The truth of the matter is If you're naked then you should cover yourself, not close your eyes and pretend you're not naked because you cant see yourself naked! If you do that then only you're the fool and everyone else is already seeing you naked!
posted on Nov 05, 2012, 2:29 PM 2
Send a warning to post author
Send a warning to Selected user.
The user has 0 warnings currently.
Next warning will result in ban!
Ban user and delete all posts
Message to PhoneArena moderator (optional):