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Even if this seemingly premature and speculative analysis is correct, it shouldn't come as a surprise that Apple makes a good profit margin on their hardware. I
by gr366 17y ago
Even if this seemingly premature and speculative analysis is correct, it shouldn't come as a surprise that Apple makes a good profit margin on their hardware. In the last decade they've demonstrated the pattern of using media distribution as the loss leader to sell their profitable hardware.
What's impressive this time is that they may make such a healthy margin on a hardware product that came in so far under everyone's expected $800-1000 price point.
- raganwald 17y agoIIRC, Apple currently dominates the profit margin on computers even though it doesn't dominate volume, thanks to its ability to sell value. The very nice thing about this (if true) is that it will allow Apple to continue to mercilessly drive prices down while continuing to invest in R&D. That's exactly what they did with iPods and laptops, and it must be insanely difficult to compete with them. Can you imagine rolling out a product priced at $450 knowing Apple could put the iPad on sale for $400 and still make money? What are you going to do, break even at $400 only to watch them sell it for $350 and outsell you and still make money?
- gte910h 17y agoI honestly am amused at those guys who screwed over TechCrunch at this point. They're sitting at a device they need to sell at a 500 buck price point, in direct competition....