6 ms·

> in volume I doubt a retina screen is any more expensive than the low-res ones I'm skeptical! Retina has more and smaller parts that require better machines t

> in volume I doubt a retina screen is any more expensive than the low-res ones I'm skeptical! Retina has more and smaller parts that require better machines to work with. Source or evidence? PS iPhone's miniaturization adds cost compared with an iPad. And it has margins over 50% instead of 30-35%.

ajross 14y ago
The fact that desktop flat panel retail prices have never scaled by LCD element pitch is the best I have. But in general arguments of the form "newer/better/fancier technology must be more expensive!" are always wrong. Things are getting cheaper, not more expensive. This has been nearly-universally true over the last three decades. I see nothing special about LCDs that would argue against that. Occasionally you can see situations where "old" stuff is cheaper, but usually it's due to things like mature production processes being exploited by manufacturers who aren't competing at the high end anymore (and thus don't have to pay for their own R&D and/or worry about cannibalizing sales). I know you want to believe that it costs Apple $559 to make that $600 phone, but it doesn't. It's probably not even close. You're being fleeced, and that's a good thing for the industry as it drives innovation.
- rdouble 14y ago
  There's been breakdowns of the cost to produce the iPhone. The BOM on the iPhone 5 is about $170, then throw in labor, marketing, distribution, etc. I think for iPhone 1, it was estimated Apple's cost was about $240 per device.
  - tanzam75 14y ago
    It takes them, what, four iPads to equal the profit from a single iPhone? Or, equivalently, how many iPad Minis? If iPhone margins ever fell to what they are on the iPad, they'd be smaller than Microsoft, or IBM, or Google. That's the open secret of Apple's financials. It is only their incredible profit on the phone that keeps them on top of the tech world.
- Someone 14y ago
  Look at it this way: that first retina screen costs $100 million or so (I pull numbers out of thin air here, so please don't comment on such details) because you need to build the factory. After that, the first million or so cost $300 each because yield is low. In due time, the guys running the machinery get a feeling for how to run it most efficiently and technicians remove some observed problems. So, over time, production cost drops to $100 or so. You can't price that first one at $100 million, so you have to spread that cost out. You want to ask $300+ each from that first million, though, because a) if you were to lower price, demand would rise, and you do not want to invest too much in first-generation machinery that you expect to be imperfect, b) you want that $100 million back as fast as possible, and c) you do not know over how many devices you can spread your investment. Your competitor might come out with a 3D screen a year after your production started or two weeks after it. So, if the market can bear it, you increase prices. Also, retina displays will likely get dirt-cheap over time. The only thing stopping that would be if we hit some technological limit, as sort-of happened with desktop CPU's for the past few years.
- xenophanes 14y ago
  > I know you want to believe that it costs Apple $559 to make that $600 phone, but it doesn't. Did you miss the part where i mentioned iPhone margins are over 50%? I know that margins over 50% means it costs apple less than $300 to make an iPhone, not $559. Or something in that ballpark. Margins are lower on the smallest iPhones and go up a great deal on the ones with higher capacity. Putting in a little more flash storage costs apple very little compared to the extra $100-200 they charge for it, the margins on that are much higher than on the base phone. All I was saying is that i think iPhone components and manufacturing labor genuinely do cost more than for iPad mini, and retina costs more than non-retina. Here are some rough guesses, I think they are in the right ballpark: >> 260 / (1 - 0.6) => 650.0 >> 230 / (1 - 0.33) => 343.283582089552 Maybe iPhone costs 260 to make and has 60% margins, and iPad mini costs 230 to make and has 33% margins. The results are in the right area for the average selling price of the devices. This would put the cost of materials $30 apart. If the retina screen costs an extra $15, it actually accounts for half the difference in component costs, it's significant. (higher margins are more significant, of course) Or maybe non-retina screens are $20, and retina are $30. Then the retina ones cost 50% more, that's significant (and still 1/3 of the component cost differences).
recoiledsnake 14y ago
The iPod Touch 4th gen with Retina is only $199

ajross 14y ago

The fact that desktop flat panel retail prices have never scaled by LCD element pitch is the best I have. But in general arguments of the form "newer/better/fancier technology must be more expensive!" are always wrong. Things are getting cheaper, not more expensive. This has been nearly-universally true over the last three decades. I see nothing special about LCDs that would argue against that. Occasionally you can see situations where "old" stuff is cheaper, but usually it's due to things like mature production processes being exploited by manufacturers who aren't competing at the high end anymore (and thus don't have to pay for their own R&D and/or worry about cannibalizing sales). I know you want to believe that it costs Apple $559 to make that $600 phone, but it doesn't. It's probably not even close. You're being fleeced, and that's a good thing for the industry as it drives innovation.

rdouble 14y ago
There's been breakdowns of the cost to produce the iPhone. The BOM on the iPhone 5 is about $170, then throw in labor, marketing, distribution, etc. I think for iPhone 1, it was estimated Apple's cost was about $240 per device.
- tanzam75 14y ago
  It takes them, what, four iPads to equal the profit from a single iPhone? Or, equivalently, how many iPad Minis? If iPhone margins ever fell to what they are on the iPad, they'd be smaller than Microsoft, or IBM, or Google. That's the open secret of Apple's financials. It is only their incredible profit on the phone that keeps them on top of the tech world.
Someone 14y ago
Look at it this way: that first retina screen costs $100 million or so (I pull numbers out of thin air here, so please don't comment on such details) because you need to build the factory. After that, the first million or so cost $300 each because yield is low. In due time, the guys running the machinery get a feeling for how to run it most efficiently and technicians remove some observed problems. So, over time, production cost drops to $100 or so. You can't price that first one at $100 million, so you have to spread that cost out. You want to ask $300+ each from that first million, though, because a) if you were to lower price, demand would rise, and you do not want to invest too much in first-generation machinery that you expect to be imperfect, b) you want that $100 million back as fast as possible, and c) you do not know over how many devices you can spread your investment. Your competitor might come out with a 3D screen a year after your production started or two weeks after it. So, if the market can bear it, you increase prices. Also, retina displays will likely get dirt-cheap over time. The only thing stopping that would be if we hit some technological limit, as sort-of happened with desktop CPU's for the past few years.
xenophanes 14y ago
> I know you want to believe that it costs Apple $559 to make that $600 phone, but it doesn't. Did you miss the part where i mentioned iPhone margins are over 50%? I know that margins over 50% means it costs apple less than $300 to make an iPhone, not $559. Or something in that ballpark. Margins are lower on the smallest iPhones and go up a great deal on the ones with higher capacity. Putting in a little more flash storage costs apple very little compared to the extra $100-200 they charge for it, the margins on that are much higher than on the base phone. All I was saying is that i think iPhone components and manufacturing labor genuinely do cost more than for iPad mini, and retina costs more than non-retina. Here are some rough guesses, I think they are in the right ballpark: >> 260 / (1 - 0.6) => 650.0 >> 230 / (1 - 0.33) => 343.283582089552 Maybe iPhone costs 260 to make and has 60% margins, and iPad mini costs 230 to make and has 33% margins. The results are in the right area for the average selling price of the devices. This would put the cost of materials $30 apart. If the retina screen costs an extra $15, it actually accounts for half the difference in component costs, it's significant. (higher margins are more significant, of course) Or maybe non-retina screens are $20, and retina are $30. Then the retina ones cost 50% more, that's significant (and still 1/3 of the component cost differences).

recoiledsnake 14y ago

The iPod Touch 4th gen with Retina is only $199