5 ms·

Manufacturing is expensive. The vast majority of the $32M goes simply to manufacturing. The remainder covers taxes, fees, shipping, certification, and returns.

• lsiebert 13y ago
  Money isn't static, and the interest isn't negligible. Assuming you can get 1 % interest per month on the 32,000,000 before paying it out, that is still 320k. They can hold it for 2-3 months and pay their developers easily.
  • Guvante 13y ago
    You can't get 1% interest risk free in a high-interest market, let alone the current one. If you try really hard you can get 1% a year without taking on risk. And you can't have any risk if you are going to be manufacturing phones with that money (sorry we don't have enough phones, we bet on Apple and their stock went down 20%).
    • YokoZar 13y ago
      US Government Treasury bonds have a 3.5% annual interest rate. I'm pretty sure that buying them does not require trying hard.
      • _delirium 13y ago
        The grandparent was talking about 1% per month, though. That would equate to (with compounding) a 12.5% annual interest rate, which no remotely safe financial instrument is paying.
      • Guvante 13y ago
        What bond has that high of an interest rate? I am seeing 0.3% annual rates for US bonds right now. (And that is for 2 year bonds, not very good for 1-3 month lags)
        • YokoZar 13y ago
          Even if you only need the money for a year, there is no reason you can't buy 30 year bonds and sell them later. Short term treasury bonds get a much lower price because they are dominated by buyers that are obligated to buy them for some reason (they've even had negative interest rates in the past).
          • jussij 13y ago
            > there is no reason you can't buy 30 year bonds and sell them later. Except, there are no guarantees the price you get on the sale of those bonds will be the same as the price you initially payed. The possibilities are you might get your money back, you might make money or you might lose money on that sale. Edit: In fact as can be seen by the graph below the yield on 30 Year T-Bonds is going up, indicating the price of the bond is falling (as the price moves inversly to the yield). http://www.marketwatch.com/investing/bond/30_year http://www.marketwatch.com/investing/bond/30_year NOTE: See the 6m curve from link above
          • effn 13y ago
            No, short term bonds get lower yield because they carry much less interest rate risk. There's no free lunch.
            • YokoZar 13y ago
              That cannot explain a negative interest rate.
              • _delirium 13y ago
                That's just an indication of their safety. Short-term U.S. Treasuries are being used as a safe bank account by a number of people with money to park who don't trust regular banks, and don't want to expose themselves to the interest-rate risk that long-term bonds bring. This raises demand and pushes down interest rates, sometimes even into the negative range. If you're an American with, say, $75k to park, there's no reason to put it in a treasury at negative interest, of course: you can just put it in an FDIC-insured bank account. But if you're a Cypriot with $50m to park, buying treasuries looks attractive relative to Eurobonds or Cypriot banks, and continues to look attractive even if prices rise to the point where the interest rate is moderately negative. But in neither case should you buy a 30-year bond for short-term cash parking, unless you are either hedged against the interest-rate risk, or willing to expose yourself to a bet on the direction interest rates will move. If they move the wrong way, your $100k might be worth $90k next year, which will completely wipe out your 3.5% interest and more.
      • effn 13y ago
        30-year bonds do, but they are not risk-free unless you hold them to maturity.