Cnet’s recent article on the likely cost to manufacture iPhone and iPads after Apple allowed ABC News into its Chinese factories. Would it make you sick to know that expers calculate that cost at less than 10% of the retail price? I understand R & D, but come on this is the 4th generation. And if I remember from my school courses (yes, I was listening professor), there’s a thing called amortization that should diminish that cost over time; and each generation seems to have fewer new bells and whistles. None of the creations were cheap. The iPhone4S reportedly brought in four million dollars for Apple in the first few days of its release. Even if you inflate the cost to 25% to take marketing, etc. into account, that’s still a 75% profit.
Per CNet, even adding in shipping from China and cost of potential warranties for Apple, it’s still seems a rather ridiculous mark-up. Especially, since Apple has a ravenous market in Asia, so shipping there would likely be pretty inexpensive. A mark-up, I think, that Apple knows they can get away with because of our need for the cache. The latest and greatest. As well, as the psychological: many of us think that (insert the name of any “high-end” product here) must be good, special if it’s really expensive. And, it could be that many of you really, really, REALLY love that phone and find it indispensable.
Only the recent version of the iPhone held any interest to me. Still, the cost never matched up to its worth. But, then I’m a Frugalista. Also gadgets don’t make me salivate. If Siri and I ever get together, it will likely be after another generation comes out and the price drops to more Macy’s than Bergdorf Goodman. For those of you who have held out against purchasing the (whatever) new generation of Apple products, you might find this website helpful: iPhone Repair Services, Top Ten Reviews 2012.
As an iPhone owner if the markup info wounds you, here’s a bit of a salve. Cnet has a whole section dedicated to comprehensive coverage about your iPhone. It also answers questions, such as: “Why does my iPhone take upside down photos?” Go here to check it out.
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