5 ms·

As Tablet Race Heats Up, Apple May Try Smaller Device

6 points by vellum 14y ago

jfb 14y ago
The most important thing to remember when trying to accurately predict what Apple will do is to remember that they make their (not inconsiderable) money from their unbelievable margins on hardware. They may well make a 7" iPad, but only when the cost of so doing falls below their expected profit margin. They're not looking to own 100% of any particular market -- rather, they're just trying to capture the maximal profit possible. A 7" iPad is probable, but it's not intended to kill the Android-based 7" computers, but rather, because Apple's supply chain mastery and logistics has made it possible for them to make money at a $200 price point.
- r00fus 14y ago
  Is this true? doesn't the iPad, or hell, the iPod touch have lower margins compared to the iPhone? Apple isn't a slave to margins. They can and will (as Cook publicly stated) sacrifice margins to release a new product or to solidify their brand image.
  - jfb 14y ago
    I think that's bafflegab and hand waving. I claim no particular expertise from working there, but I haven't seen Apple move into any hardware market that they can't make ridiculous profits from.
    - beagle3 14y ago
      They probably don't make ridiculous profits on the AppleTV: At MSRP $100 and available $80 every other weekend at respectable retailers if you look for it (I used to see it at $80 e.g. through dealnews.com when I was looking), I assume that the retailers pay $60-$70 for it. BOM and build is probably of the order of $50/unit (think Raspberry Pi + Flash storage + Box + Wifi + Power Adapter + Remove; then subtract Apple economoy of scale). They're probably making $10-$15 on each unit, about $1-$3 would actually go to pay for the software and support. That's good solid profits. But it's not ridiculous profits.
  - vlad 14y ago
    Apple's profit margin on the iPad is 30 to 50 percent according to an article also posted on Hacker News today, though these estimates are only for component costs and not anything else. http://www.slate.com/articles/technology/technology/2012/07/apple_profit_margins_you_re_paying_way_way_too_much_to_get_a_little_more_space_on_your_ipad_and_iphone_.single.html http://www.slate.com/articles/technology/technology/2012/07/...

6 points by vellum 14y ago

jfb 14y ago

The most important thing to remember when trying to accurately predict what Apple will do is to remember that they make their (not inconsiderable) money from their unbelievable margins on hardware. They may well make a 7" iPad, but only when the cost of so doing falls below their expected profit margin. They're not looking to own 100% of any particular market -- rather, they're just trying to capture the maximal profit possible. A 7" iPad is probable, but it's not intended to kill the Android-based 7" computers, but rather, because Apple's supply chain mastery and logistics has made it possible for them to make money at a $200 price point.

r00fus 14y ago
Is this true? doesn't the iPad, or hell, the iPod touch have lower margins compared to the iPhone? Apple isn't a slave to margins. They can and will (as Cook publicly stated) sacrifice margins to release a new product or to solidify their brand image.
- jfb 14y ago
  I think that's bafflegab and hand waving. I claim no particular expertise from working there, but I haven't seen Apple move into any hardware market that they can't make ridiculous profits from.
  - beagle3 14y ago
    They probably don't make ridiculous profits on the AppleTV: At MSRP $100 and available $80 every other weekend at respectable retailers if you look for it (I used to see it at $80 e.g. through dealnews.com when I was looking), I assume that the retailers pay $60-$70 for it. BOM and build is probably of the order of $50/unit (think Raspberry Pi + Flash storage + Box + Wifi + Power Adapter + Remove; then subtract Apple economoy of scale). They're probably making $10-$15 on each unit, about $1-$3 would actually go to pay for the software and support. That's good solid profits. But it's not ridiculous profits.
- vlad 14y ago
  Apple's profit margin on the iPad is 30 to 50 percent according to an article also posted on Hacker News today, though these estimates are only for component costs and not anything else. http://www.slate.com/articles/technology/technology/2012/07/apple_profit_margins_you_re_paying_way_way_too_much_to_get_a_little_more_space_on_your_ipad_and_iphone_.single.html http://www.slate.com/articles/technology/technology/2012/07/...