4 ms·

>A bill of materials like this doesn't take into account manufacturing, shipping, or marketing, nor does it factor in the cost of research and development. it

>A bill of materials like this doesn't take into account manufacturing, shipping, or marketing, nor does it factor in the cost of research and development. it also (likely) doesn't take into account the massive discounts you get at scale and Apple's famously optimized supply chain. I wouldn't be surprised if the real BOM is sub 1K.

deleted 3y ago
[deleted]
danpalmer 3y ago
I'm not so sure. Taking the displays at $228, these are specialist components that require integration work – I don't think one can walk into the Sony offices and ask to buy one (1) of them. That would then suggest that the "sticker price" is accounting for a certain level of scale, and while Apple are high volume in general, this device is not particularly high volume. Also volume discounts on components such as this don't tend to be that significant as to achieve a 33% reduction on price.
- notso411 3y ago
  [dead]
acdha 3y ago
Isn’t that this company’s entire business? I’d be surprised if they were anywhere that far off on the first question most people would have, and most of those parts are quite specialized so you aren’t going to see volume discounts unless the market grows significantly.
hnbad 3y ago
The Vision Pro doesn't exactly seem to have reached what I would normally think of as mass production so I wouldn't be surprised if the scale doesn't really work for them yet. That said, with raw numbers like this I always have to think of the teardown of the Juicero which revealed that it used numerous custom parts that certainly made it very expensive to manufacture: https://blog.bolt.io/juicero/ https://blog.bolt.io/juicero/ The catch with Juicero of course is that while the parts were very expensive, it could have been made much cheaper by using standard parts instead of the custom ones. I'm not saying that's the case here but it's worth taking these things with a grain of salt.
- subtra3t 3y ago
  Some economies of scale take effect not with the scale of production but with the size of the business. And Apple is as big a business as any.
- bombcar 3y ago
  It’s also a trade off balance - if you use custom parts you can make them “all perfect” and save money at volume - if you use standard parts you save money at the beginning but often have a larger product than otherwise. Apple obviously had some serious discussions on this and came down on the “customize to make it the best we can” and “don’t subsidize it at all” - unlike how some consoles were done.
Aurornis 3y ago
It’s their job to take these things into account. This is a brand new, low volume product. The supply chain isn’t yet heavily optimized and there are a lot of tooling and NRE costs to make up. Even if the BOM was $1K, that’s right in line with the standard 3-4X retail price multiplier expected for hardware products.

deleted 3y ago

[deleted]

danpalmer 3y ago

I'm not so sure. Taking the displays at $228, these are specialist components that require integration work – I don't think one can walk into the Sony offices and ask to buy one (1) of them. That would then suggest that the "sticker price" is accounting for a certain level of scale, and while Apple are high volume in general, this device is not particularly high volume. Also volume discounts on components such as this don't tend to be that significant as to achieve a 33% reduction on price.

notso411 3y ago
[dead]

acdha 3y ago

Isn’t that this company’s entire business? I’d be surprised if they were anywhere that far off on the first question most people would have, and most of those parts are quite specialized so you aren’t going to see volume discounts unless the market grows significantly.

hnbad 3y ago

The Vision Pro doesn't exactly seem to have reached what I would normally think of as mass production so I wouldn't be surprised if the scale doesn't really work for them yet. That said, with raw numbers like this I always have to think of the teardown of the Juicero which revealed that it used numerous custom parts that certainly made it very expensive to manufacture: https://blog.bolt.io/juicero/ https://blog.bolt.io/juicero/ The catch with Juicero of course is that while the parts were very expensive, it could have been made much cheaper by using standard parts instead of the custom ones. I'm not saying that's the case here but it's worth taking these things with a grain of salt.

subtra3t 3y ago
Some economies of scale take effect not with the scale of production but with the size of the business. And Apple is as big a business as any.
bombcar 3y ago
It’s also a trade off balance - if you use custom parts you can make them “all perfect” and save money at volume - if you use standard parts you save money at the beginning but often have a larger product than otherwise. Apple obviously had some serious discussions on this and came down on the “customize to make it the best we can” and “don’t subsidize it at all” - unlike how some consoles were done.

Aurornis 3y ago

It’s their job to take these things into account. This is a brand new, low volume product. The supply chain isn’t yet heavily optimized and there are a lot of tooling and NRE costs to make up. Even if the BOM was $1K, that’s right in line with the standard 3-4X retail price multiplier expected for hardware products.