posted 02-04-2010 10:56 AM                       

quote: Galen Murphy-Fahlgren

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I guess I don't understand the market this is trying to compete in. It seems like a mobile device, because it doesn't have a real OS, but it is way too big. If it wanted to be a tablet, it should have a tablet OS, which shouldn't be a problem, since I thought Apple was supposed to be good at software. If it wanted to be an ebook reader, it should be billed as such. Even then, why should I buy this over a Kindle, at twice the price?

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posted 02-10-2010 03:11 PM                   

quote:

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Feb. 10 (Bloomberg) -- Apple Inc.’s iPad tablet computer carries component costs of as little as $219.35, less than half its retail price, according to a preliminary estimate by market research firm ISuppli Corp.

Materials for the iPad, due to go on sale in March and April, include a touch-screen display that may cost about $80 and a $17 processor designed by Apple and made by Samsung Electronics Co., according to El Segundo, California-based ISuppli. Apple introduced the device on Jan. 27.

Even the lowest-priced iPad, with 16 gigabytes of memory and a retail price of $499, may be beyond the reach of budget- conscious consumers, some analysts have said. The relatively low price of the iPad’s materials gives Apple flexibility to reduce the retail price over time, ISuppli analyst Francis Sideco said.

“There’s certainly a decent amount of headroom in there,” Sideco said. “If they had to reduce the retail price, they certainly could.”

Bill Shope, an analyst at Credit Suisse in New York, fueled speculation over price cuts when he released a research note on Feb. 8 saying Apple may be flexible on pricing if the iPad doesn’t attract as many buyers as hoped.

“While it remains to be seen how much traction the iPad gets initially, management noted that it will remain nimble,” Shope wrote in the note, citing recent meetings with Apple executives.

Colin Smith, a spokesman for Cupertino, California-based Apple, declined to comment on ISuppli’s research or the prospect of price cuts for the iPad.

Teardown Analysis

Apple rose 17 cents to $196.36 at 9:37 a.m. New York time in Nasdaq Stock Market trading. The shares had fallen 6.9 percent this year before today.

Research firms conduct so-called teardown analysis of consumer electronics to determine component prices and makers and to estimate profit margins. Researchers at ISuppli didn’t have an actual iPad and instead relied on Apple’s public statements on its features.

The iPad’s most expensive component will be its 9.7-inch multitouch display, similar to the one found on the iPhone though more than twice its size. At $80, the screen will cost Apple about five times the price of the display used on the iPhone 3GS. South Korea-based LG Electronics Inc. is the most likely supplier of the screen, Sideco says. Apple hasn’t disclosed the identity of the maker, and LG spokesman John Taylor didn’t immediately return a call seeking comment.

The chip running the iPad is called the A4, the fruit of Apple’s 2008 acquisition of P.A. Semi Inc. for $278 million.

Chip Foundry

Samsung supplies the main applications chip used in the iPhone 3GS and two previous iPhone models. In the case of the iPad, Samsung is playing a role akin to a chip foundry, building the chip under contract based on Apple’s design, Sideco says.

Chip foundry companies including Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp., both of Taiwan, similarly make chips for so-called fabless chip companies that don’t have the means to build their own semiconductor factories. Sideco estimates the A4 will cost Apple about $17 each, about $2.54 more than the Samsung chip used in the iPhone 3GS.

Of the six iPad models that Apple plans to release in March and April, three will have access to 3G wireless data networks and three will work only with Wi-Fi. Each will offer either 16 gigabytes, 32 gigabytes or 64 gigabytes of memory for storing data. The memory chips represent the key variable cost across all six models, Sideco said. The price of 16 GB of flash memory is $29.50, while 32 GB costs $59 and 64 GB costs $118.

The most profitable of the six iPads is the 32-GB version with 3G network access, Sideco says. Its combined materials and manufacturing cost of $287.15 amount to 39 percent of the retail price. The least profitable is the 16-GB non-3G version, which sells for $499. Its combined costs total $229.35, or 46 percent of the retail price, leaving the slimmest potential profit margin of the six.

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And we all know that the lion share of profits from today's devices come from the communication contracts, software and content downloads used ...

To bring it on topic, kind-of-like cinemas. You could almost let people in at cost as long as they buy popcorn ...

posted 02-10-2010 03:47 PM                       

quote: Bobby Henderson

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I realize a huge number of people love iPods, but I hate iTunes and its penchant for "owning" your music and not letting you make copies of the AAC files and such. Screw that, it's a deal-breaker. If I buy a music file online, I'll get something DRM-free that I can copy onto various discs using a computer or into other devices such as an MP3 player, PS3, etc. Amazon is not too bad; the sell 256kbs VBR MP3 files.

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