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iPad Mini Costs $24 More To Make Than Kindle Fire HD

timothy posted about a year and a half ago | from the price-theory-at-work dept.

Handhelds 260

sweetpea86 writes "... but retails for $130 more. Teardowns of the Apple iPad Mini and the Amazon Kindle Fire HD have revealed that the two devices cost almost the same amount to manufacture, despite the retail prices being significantly different. Andrew Rassweiler, senior principal analyst of teardown services for IHS iSuppli, explains that Apple is sticking to the premium brand strategy it has always used for its media tablet and smartphone products, whereas Amazon is banking on content."

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Few things (5, Insightful)

SquarePixel (1851068) | about a year and a half ago | (#41893605)

First of all, Apple makes its own OS and applications while Amazon just uses Android. On top of that Amazon has always tried to keep their price down so they can sell more ebooks. Apple tries to make profit by selling their devices. These two things combined, I don't think the $100 price difference is that much. It's almost surprisingly low.

Re:Few things (2)

Anonymous Codger (96717) | about a year and a half ago | (#41893709)

Why is this currently ranked -1? The poster is absolutely right. It costs big bucks to develop and maintain your own OS, so of course Android-based tablets are cheaper (yes, I know Kindle is not pure Android, but it's built on top of it). And Amazon is selling these things as loss leaders.

Re:Few things (1, Troll)

Andy Prough (2730467) | about a year and a half ago | (#41893929)

It costs big bucks to turn all that volunteer FreeBSD coding into Apple Gold.

FIFY.

Re:Few things (1, Insightful)

Bill, Shooter of Bul (629286) | about a year and a half ago | (#41893999)

Unfortunatly, IOS && OSX of today are greatly modified versions of BSD, with a different kernel and apis. Macs were a great unix desktop ten years ago, now they just kind of blow. Linux is the only way to go these days for Unix && desktop.

Re:Few things (4, Insightful)

retchdog (1319261) | about a year and a half ago | (#41894091)

uh, what's the difference between then and now, exactly? i've been using os x for a unix environment since 2005, and the biggest change i've noticed on the unix side is that they ditched powerpc for intel (thank christ).

Re:Few things (1)

Type44Q (1233630) | about a year and a half ago | (#41894473)

uh, what's the difference between then and now, exactly?

Surely things have only improved since the early days when OS X consisted of kludged-together BSD and Mach kernels. I imagine its inner-workings are quite a bit more streamlined and efficient these days; one can only hope, anyhow...

Re:Few things (3, Interesting)

ignavusinfo (883331) | about a year and a half ago | (#41894197)

Macs were a great unix desktop ten years ago, now they just kind of blow.

I'm curious ... what's changed? I get a lot of mileage out of OS X as a developer workstation and am honestly wondering what I'd gain by switching back to Linux.

I know there's a lot of talk about cost but that's irrelevant to me, $1k this way or that over the life of a computer just doesn't matter much. There seems to be discussion about the "walled garden" but at least for what I'm doing (Erlang, Scala, Ruby, Lisp, Postgres, MySQL, Emacs, &c.) I've never run into an issue. Nor has there ever been much of an issue deploying to Linux once the code's written.

So what blows?

Re:Few things (1)

jjohnson (62583) | about a year and a half ago | (#41894079)

Wouldn't be a problem if they'd chosen a licence that didn't explicitly permit Apple to do what it did.

Re:Few things (3, Insightful)

beelsebob (529313) | about a year and a half ago | (#41894083)

You're right –Mac OS X clearly has 0 lines of code that are not from BSD.

Aside – this is the fallacy I hate that leads people to use the GPL rather than the BSD license. They somehow make an assumption that anything build on top of system A must be exactly the same as system A (or entirely stolen from system A), and no more, no matter how much more it does. This fallacy leads to the reasoning "if the sum of their work and my work is exactly the same as my work, then clearly I should get to decide how their work is licensed.

Re:Few things (0)

Anonymous Coward | about a year and a half ago | (#41894621)

Nice strawman there.
I use the GPL not because I think the code you add is less important than my code you add it to, but because I don't want my code to be hidden in an unfixable blob. I've dealt with the exact situation of RMS and the unfixable printer driver all too many times. I want my code to stay freely fixable.
The BSD contributors didn't choose a license that required this, and now it is illegal for anyone but Apple to fix OS X bugs.

Re:Few things (1)

retchdog (1319261) | about a year and a half ago | (#41894101)

gee, if that's a problem for them, i guess they should have used the gpl.

Re:Few things (5, Informative)

jellomizer (103300) | about a year and a half ago | (#41894039)

It was ranked at -1 because, most people don't understand how businesses run.

Do you sell the razors or give away the razors and sell the blades.
Do you sell a $500.00 Ink jet Printer with $10.00 cartridges. Or do you sell a $99.00 Ink Jet Printer and sell $30.00 cartridges.

Why is it you get a $10.00 meal at KFC but for the same meal you need to pay $25.00 at say Applebees?

There is more to the price then the cost of parts.

Re:Few things (1)

bhagwad (1426855) | about a year and a half ago | (#41894139)

There is more to the price then the cost of parts.

For electronics, it should be pretty much the cost of the parts. Look at the PC market.

Re:Few things (3, Funny)

NatasRevol (731260) | about a year and a half ago | (#41894265)

Look at all the businesses fleeing the PC market.

Re:Few things (1)

bhagwad (1426855) | about a year and a half ago | (#41894483)

The PC market is doing fine. And it's been absolutely great for customers. The PC has democratized computing and the world is a better place because of it.

Re:Few things (1, Troll)

poetmatt (793785) | about a year and a half ago | (#41894161)

Except that we're not talking about food or inkjets.

The point is, apple's profit isn't actual quality - it's just a surcharge for people dumb enough to buy. They didn't develop their OS or the ideas, they just refine everyone else's stuff, just like............
everyone else.

Thus, reason for apple being worth more = nonexistent.

Re:Few things (2, Insightful)

Anonymous Coward | about a year and a half ago | (#41894309)

They didn't develop their OS or the ideas

Bet you can't build something like the iPhone off of the pieces they took.
Bet ANY OTHER COMPANY can't build something like the iPhone off the pieces they took. Because even Android needed help getting to where they were by looking to Apple's OS.

But rant on, dude.

Re:Few things (4, Interesting)

mike260 (224212) | about a year and a half ago | (#41894567)

The point is, apple's profit isn't actual quality - it's just a surcharge for people dumb enough to buy

At this point there are quite a few counterexamples out there - Apple users who are clearly not dumb, nor suckers, nor computer-illiterate.

Seriously dude, it's time to let it go.

Re:Few things (1)

Anonymous Coward | about a year and a half ago | (#41894633)

Thus, reason for apple being worth more = nonexistent.

Come back after you've walked a 60 year old, over the phone, through setting up their exchange email on an iPad vs an android tablet. I haven't played with the Fire HD yet, so I don't know how easy it was, but it wasn't possible on the first-gen Fire.

Software = matters. Maybe not too much to people on /., but it certainly does to the general population. What does a person do when they get a Kindle Fire and want to set it up but know nothing about it? Play with it for a long time or bring it to a young person they know. What does that same person do if they get an iPad? Schedule an appointment at the genius bar. We're not talking about food or inkjets, but the point is actual quality. It is easier to use for normal people, and many people can get face-to-face support if they need it. That's worth a lot to many normal consumers.

Re:Few things (1, Funny)

gstoddart (321705) | about a year and a half ago | (#41894187)

Why is it you get a $10.00 meal at KFC but for the same meal you need to pay $25.00 at say Applebees?

Because KFC is nasty and not fit for human consumption? ;-)

The last two times I had KFC, after each I remember thinking "man, this stuff is gross, why do I eat it?".

But, to quote So I Married an Axe Murdered [imdb.com] ... "he puts an addictive chemical in his chicken that makes ya crave it fortnightly, smartass! "

Re:Few things (1)

Type44Q (1233630) | about a year and a half ago | (#41894529)

The last two times I had KFC, after each I remember thinking "man, this stuff is gross, why do I eat it?"

I take it you've never seen "food" (I use that term loosely) being prepared in the back of an Applebees, Chilis or Olive Garden... :p

Two Barbers (1)

goombah99 (560566) | about a year and a half ago | (#41894367)

Do you go to the $5 barber or the $25 barber? After all the cost for the barber's equipment is rougtly the same. Is the $25 barber overcharging you or delivering you something the $5 barber could not deliver? The cost of parts doesn't determine the skill of the design.

Re:Few things (1)

arekin (2605525) | about a year and a half ago | (#41894419)

Doesn't really work that way. You can't compare two functionally identical and competing products, say "but this one costs more to develop", and expect the consumer to pick up the bill when there is a cheaper option. The iPad mini is worth what people will pay for a product of its type, which is about $199 for all competing tablets. Even if what you are saying is true, people who are paying more for an iPad mini are not doing so because they feel an obligation to help apple with its OS development costs, but because its "trendy".

Re:Few things (-1)

VortexCortex (1117377) | about a year and a half ago | (#41894449)

There is more to the price then the cost of parts.

Translation: We made some decisions that made it cost more to deliver a similar experience. We're not bad at making decisions, trust us. Buy our equivalent yet more expensive hardware product. You'll love the expensive software we force you to run on the device. No, you can not get an iOS refund if you install Android on your iDevice.

Here's an interesting idea: Stop Bundling Software and Hardware. These are General Purpose Computers, folks. If the OSs are so damn great, then give folks the option to purchase it separately. If the OS is such a differentiating factor then you'll clearly make tons more money because it can be purchased for many other systems. Ah, but if the OS is fucking irrelevant then you lose the ability to control customer choice after they purchase the hardware.

It's not that people misunderstand how businesses run. It's that they're bilking us, and we don't like it.

Re:Few things (2, Insightful)

Haxagon (2454432) | about a year and a half ago | (#41893725)

No, it's most certainly not surprisingly low.
Apple has piles of money; they're not recouping losses from development with the price, just wanting more profit.
Amazon also has an app store of their own.
It's not surprisingly low, it's surprising how high it is and how someone could possibly be open to the idea of higher profit margins on their devices.

Re:Few things (4, Interesting)

garcia (6573) | about a year and a half ago | (#41893881)

It's not surprisingly low, it's surprising how high it is and how someone could possibly be open to the idea of higher profit margins on their devices.

I was in the market for a 7"-ish tablet. It was down to the FireHD, Nexus 7, or iPad Mini. While I was extremely disappointed in the price announced for the Mini, I ended up getting one anyway for a few reasons:

1. We have iPhones and my kid (who will be the primary user of the device) is already accustomed to the interface

2. The educational games/books we've downloaded for it are already there and ready to be synced.

3. I liked the educational software available in the Apple app store over what I saw available for both the Kindle and the Nexus 7. Perhaps I didn't look hard enough--I don't know but it seemed much better from the Apple side.

4. Everything the FireHD can do, the iPad can do possibly better depending on what review you read (the external speakers being one downside but I don't believe he'll be needing stereo speakers).

5. I like the look, size, and weight of the device with the larger screen.

6. As an Apple (iPhones, Mini, and MBP) and Amazon customer (I'm a Prime member and use them for video rentals, most online purchases, etc), I simply preferred the Apple device even though it was considerably more money.

YMMV.

Just one question... (0)

Andy Prough (2730467) | about a year and a half ago | (#41893965)

How old is your "kid"?

My kid is 19 and pays for her own iPhone, which is a lot more expensive than my Android.

Just wondering.

Re:Few things (-1)

Anonymous Coward | about a year and a half ago | (#41894017)

The iPad mini has stereo speakers.

iPad mini has stereo, and you can use Prime vid (1)

SuperKendall (25149) | about a year and a half ago | (#41894047)

the external speakers being one downside but I don't believe he'll be needing stereo speakers

Not quite sure if this is what you are referring to, but the iPad mini has stereo speakers (older iPads do not). Amazon had that wrong in an ad they have since pulled.

6. As an Apple (iPhones, Mini, and MBP) and Amazon customer (I'm a Prime member and use them for video rentals, most online purchases, etc)

I am also a Prime member - happily just as there is a Kindle app for the iPad, there's also an Amazon Prime Video app you can use to access video on an iPad from your Prime subscription (though I find Prime video pretty limited compared to Netflix, they have a few different things Netflix streaming does not).

Re:Few things (5, Insightful)

Anonymous Coward | about a year and a half ago | (#41894105)

1. We have iPhones and my kid (who will be the primary user of the device) is already accustomed to the interface

2. The educational games/books we've downloaded for it are already there and ready to be synced.

6. As an Apple (iPhones, Mini, and MBP) and Amazon customer (I'm a Prime member and use them for video rentals, most online purchases, etc), I simply preferred the Apple device even though it was considerably more money.

YMMV.

Apple's locked you into their ecosystem and you're paying double for the convenience. That was their plan.

Re:Few things (0)

Anonymous Coward | about a year and a half ago | (#41894389)

I don't feel I can get that convenience anywhere else. You call me a sucker but I think I just know what I want.

Re:Few things (1)

Anonymous Coward | about a year and a half ago | (#41894443)

Being in a cage and well fed is also a convenience.

Re:Few things (1)

aicrules (819392) | about a year and a half ago | (#41894563)

Given that it's just a tablet, it doesn't actually lock you in a physical cage. You're talking about the oh so important freedom of apps. While I will not be buying any of the iPads any time soon, definitely an Android fan for myself, preferring that your tablet computer just work how you want it to because it's just a tablet computer, not anything important, is just fine. This doesn't create any sort of slippery slope to giving up real freedoms as a matter of convenience. People don't want to think about their tablet computer so they can spend their time thinking about real important matters...well...I'm sure that's what at least some people do with the time they save...maybe....eh..

Re:Few things (2)

VortexCortex (1117377) | about a year and a half ago | (#41894575)

Apple's locked you into their ecosystem and you're paying double for the convenience. That was their plan.

One minor nitpick: You're not paying for convenience, you're paying to not be inconvenienced.
"So, you don't want to be inconvenienced, eh? Well, then you buy our stuff, and you pay more... Or Else. That's a nice head of hair you have there, be terrible if we made you pull it all out..."

Re:Few things (0)

Anonymous Coward | about a year and a half ago | (#41894577)

You forgot the part where he mentioned that the ecosystem is significantly better than anything else out there.

Re:Few things (0)

Anonymous Coward | about a year and a half ago | (#41894619)

Double?

You do know if you pay for something on one iOS device, you can download it for free on all the others, right?

Re:Few things (1)

MikeMo (521697) | about a year and a half ago | (#41894277)

The Mini speakers ARE stereo. That's why Amazon took down that comparison ad.

Re:Few things (1)

Anubis IV (1279820) | about a year and a half ago | (#41894569)

As has been pointed out, the iPad mini has stereo speakers. A comparison checklist between the Kindle Fire and the iPad mini was briefly posted by Amazon, and it incorrectly listed the iPad mini as not having stereo speakers, which is where most people seem to have gotten that idea (the list was later pulled offline after numerous other complaints regarding misleading statements and other inaccuracies in it).

Apple hasn't exactly made a point of mentioning the fact that it has stereo, but teardowns of the device have shown that it does, and Apple has confirmed that this is indeed the case.

Also, as has been pointed out, Amazon is interested in selling content, regardless of device, so you can access all of your Amazon content from an iPad, whereas the opposite is not true with the Kindle. As such, it doesn't need to be an "either-or" choice, but can instead be a "both".

Re:Few things (4, Insightful)

beelsebob (529313) | about a year and a half ago | (#41894133)

Apple has piles of money; they're not recouping losses from development with the price, just wanting more profit.

No shit... They're a company, that's what companies do.

Amazon also has an app store of their own.

Yes, the point being that Amazon, being a company, also want to make substantial profit. They just have a different model for how they do it.

In Apple's case the model is "Provide lots of content for cheap, then people will want to buy that hardware that can use that content at a premium".
In Amazon's case the model is "Provide a piece of hardware for cheap, then people will use that hardware to buy content for it from us at a premium".

This difference leads to the Apple hardware being significantly more expensive. Big surprise.

Re:Few things (2)

NatasRevol (731260) | about a year and a half ago | (#41894373)

Also, for some reason, AMZN's model seems to be better valued on Wall Street, with a PE of >3100, in spite of the fact that they basically have no profits for like a decade. But AAPL, with huge growth of profits only has a PE of 13.

Re:Few things (1)

mr_gorkajuice (1347383) | about a year and a half ago | (#41894401)

I'm not familiar with either either Apple or Amazon App Store, but I was of the impression that the prices were roughly equal?

In which case, the Apple model is "Make a lot of profit from hardware AND content, because people will buy our stuff anyway."

Re:Few things (1, Insightful)

geekoid (135745) | about a year and a half ago | (#41894403)

What cheap content on Apple? I'ts the same and often cheaper on Amazonb.

Apples case is: People want to be hip, cool and cutting edge while not actually having to learn anything. We market that and charge.
To quote Smithers: "Well, it's a policy that ensures a healthy mix of the rich and the ignorant, sir. "

Amazons case is: "Get everyone Apple doesn't get."

One main difference: (1)

grumpyman (849537) | about a year and a half ago | (#41894075)

4:3 and 16:9. Even the cheapo Chinese tabs have significant difference on pricing on those - screen size is bigger and possibly has to do with volume. 7.9" is really 8" - Apple just tries to let people 'compare' them with the Fire/Galaxy but it's really apples/oranges.

Re:Few things (1)

bhagwad (1426855) | about a year and a half ago | (#41894119)

Did you say "surprising low"? What kind of markup (in percentage) do you think is "reasonable" and not "surprisingly low"? And perhaps you can also tell us what is "surprisingly high" just for comparison.

Re:Few things (1)

Bearhouse (1034238) | about a year and a half ago | (#41894177)

Indeed. In which case a better comparison of pricing policies is perhaps with Microsoft. At the end of the article is this...

IHS iSuppli has also done a teardown of Microsoft's £399 Surface tablet, revealing that the device costs just $271 (£170) to build....

Re:Few things (1)

StripedCow (776465) | about a year and a half ago | (#41894181)

First of all, Apple makes its own OS and applications while Amazon just uses Android.

The origin of the goods are not of interest here. Just the price versus the quality.
If Apple is more expensive by making more expensive decisions, that's their choice. It doesn't help the consumer.

Re:Few things (0)

Anonymous Coward | about a year and a half ago | (#41894509)

It doesn't justify the 25% profit margin, which is 5 times what is typical for the industry. And why doesn't content subsidy apply to Apple? They make a lot of money off iTunes. You're paying a premium for the product, but you still have ads and a closed content ecosystem.

Having said that, a lot of people simply prefer iOS devices and are willing to pay a premium for them. It's not like the iPad mini isn't selling. Sure, Apple could price their products lower, but why should they? They're selling fine now and lower prices would hurt Apple's share price. It's not until people stop buying iPads that Apple has to worry.

The iPad mini already reflects something of a price cut due to pressure from the Kindle, Nook, and Nexus 7. Apple has already more or less lost the cellphone market to Android, which increases marketshare every quarter. I suspect this is the last year the iPad will remain the dominant tablet.

iPad mini will have lower lifetime revenue? (1)

swb (14022) | about a year and a half ago | (#41894589)

I wonder if Apple figured that the Mini would be going predominantly to people who:

1) Own an iPhone but not an iPad
2) Previous version iPad owners looking for a smaller device upgrade
3) iDevice completists who want to own one or more of each

Each of these groups will buy less content over time because they already have a lot of apps and other content on their other devices; the Mini simply becomes yet another consumption device and they will not be buying more content specifically for the mini, hence the margin is higher than it would otherwise be for 'primary' devices.

I own an iPhone and iPad 3 but had little interest in the Mini due to hardware specs and lack of a reason to own one outside of curiosity. However, had they included telephony (with the option to take my iPhone 5 SIM...) I might have been interested as it would have been an interesting compromise device when traveling or away from home when the Phone would be too tedious for books or movies and an iPad would have been too big/fragile.

Re:Few things (1)

Lawrence61 (868933) | about a year and a half ago | (#41894617)

I totally agree, the price for what you get, its a great value, Amazon's is just crap in comparison.

Why is this said with any implication of surprise (5, Insightful)

jeffmeden (135043) | about a year and a half ago | (#41893665)

The $35 in extra cost turns into $130 at the consumer level. That's actually pretty much right for a manufactured good. You see, when someone makes a product they typically want to charge MORE for it than it costs to produce. This difference is called Profit. The more it costs, the more you must charge. Plus, it's apple. Even if it cost less, they are selling you the device plus the brand. Or did you think Phil Shiller worked for free?

Re:Why is this said with any implication of surpri (1)

Shinmera (2514940) | about a year and a half ago | (#41893723)

You're saying that as if the Kindle Fire HD didn't sell for more than it costs to manufacture. I'm pretty sure that they too want to make profit.

Re:Why is this said with any implication of surpri (1)

Anonymous Coward | about a year and a half ago | (#41893829)

No, they just want market saturation. They make their money off of store purchases and advertising. They make more money if more people are using their services, rather than buying their devices.

Re:Why is this said with any implication of surpri (1)

Anonymous Coward | about a year and a half ago | (#41893837)

You're saying that as if the Kindle Fire HD didn't sell for more than it costs to manufacture. I'm pretty sure that they too want to make profit.

Amazon has stated they're not trying to make money on hardware, they are focusing on sales on the devices.

http://www.engadget.com/2012/10/12/amazon-kindle-fire-hd-paperwhite-hardware-no-profit/

Re:Why is this said with any implication of surpri (1)

Anonymous Coward | about a year and a half ago | (#41893879)

You're saying that as if the Kindle Fire HD didn't sell for more than it costs to manufacture. I'm pretty sure that they too want to make profit.

You (and the article) miss the point about the economics of manufacturing. It's not like every single manufactured item is aiming for the same markup. It might help you realize how silly it would be to expect (for example) that a vehicle should should have the same markup as a toaster. That's dumb. The OP is right; the more expensive the item is, the higher the markup has to be to account for higher R&D costs and to help offset the higher risk.

There are legitimate reasons to criticize Apple, but this is stretching... far....

Re:Why is this said with any implication of surpri (0)

Anonymous Coward | about a year and a half ago | (#41894191)

It might help you realize how silly it would be to expect (for example) that a vehicle should should have the same markup as a toaster. That's dumb.

It might help you to realize that we're not comparing a vehicle to a toaster, but different models of vehicles from different manufacturers. I'd expect a Chrysler, GM and Ford vehicles to all have similar markups.

Re:Why is this said with any implication of surpri (2)

aicrules (819392) | about a year and a half ago | (#41894629)

Because Chrysler, GM and Ford all create same luxury level. Compare a Lexus to a Camry and while the production cost of a lexus may only be a little more, the MSRP is significantly more. Yes those are from the same manufacturer, but people still buy the Lexus even though it does the same thing as the Camry, just looks better doing it.

Re:Why is this said with any implication of surpri (0)

Anonymous Coward | about a year and a half ago | (#41893797)

Gaming consoles? Cheap mobile phones? Give people the hardware for virtually free, make profit on the services. How does the income from the app store compare to the hardware profits?

Re:Why is this said with any implication of surpri (4, Informative)

vlm (69642) | about a year and a half ago | (#41893847)

The $35 in extra cost turns into $130 at the consumer level. That's actually pretty much right for a manufactured good

Oh, you were so close to being correct, and then missed.

The reason its so close is middlemen. If it costs a farmer 10 cents more to grow an apple, that doesn't mean YOU pay the food store 10 cents more, it means the wholesaler gets 2*10 cents = 20 cents more, the distributor/franchise operator gets 2*20 cents = 40 cents more, the store needs to charge twice invoice on average to keep the lights on, etc, so you pay 2*40 cents = 80 cents more at the store.

Its not quite so bad with market leading electronics, but its bad. I can totally see if a battery costs $4 more, the retail price after layers and layers of middlemen could very well increase $13.

The price at a direct mfgr store goes up because the resellers demand it contractually in order to stock it, Walmart would never carry the kindle if amazon could undercut it every time, so the price, even online, reflects the maximum amount of middleman profiteering via any channel. Mandatory minimum pricing and all that. Yes apple.com probably COULD sell it for only $35 more, but walmart etc would freak out and sue them, so they have to sell it for $130 more.

Re:Why is this said with any implication of surpri (1)

jeffmeden (135043) | about a year and a half ago | (#41894453)

If MMP were somehow not part of the equation, the MSRP would just be something ridiculous like $599 and then each outlet would offer a "great deal" to their own liking (this is what happens with goods that aren't as easy to MMP like an iPad) and the consumer would end up shelling out $329 or something close, depending on how discriminating (in the economic sense) they were. The profit WILL be had.

Re:Why is this said with any implication of surpri (1)

AmiMoJo (196126) | about a year and a half ago | (#41893857)

The point is that Amazon doesn't need to make a huge profit on the Kindle Fire because they can then sell you content too.

Apple wants to do both, the greedy, greedy bastards.

Re:Why is this said with any implication of surpri (0)

Anonymous Coward | about a year and a half ago | (#41893969)

All this talk about greed is ridiculous. All companies want huge profits. Amazon priced the Kindle as they did because they though it would maximize profit. Apple did the same with the iPad mini. That is what companies do.

Re:Why is this said with any implication of surpri (2, Informative)

Jintsui (2759005) | about a year and a half ago | (#41893959)

Perhaps if people didnt kiss Apples ass and buy everything that has an Apple logo, regardless of price, their prices wouldnt be outrageously high to begin with..

Re:Why is this said with any implication of surpri (1)

rjstanford (69735) | about a year and a half ago | (#41894189)

Not only that, but $24 in parts cost plus additional labor cost (the iPad mini looks significantly trickier to assemble than the Fire does), and it certainly doesn't appear out of line.

Who's buying? (1)

xxxJonBoyxxx (565205) | about a year and a half ago | (#41893707)

I own an iPad, an iPod, two Android devices and a Nexus 7 is on its way in the mail. I still haven't purchased anything from any app store.

Furthermore I'm not sure what would compel me to do so: free games are good enough, productivity apps are free, and music, movies and books are still basically free as long as you have a desktop, laptop, or friends.

Re:Who's buying? (-1)

Anonymous Coward | about a year and a half ago | (#41893771)

free games are good enough, productivity apps are free, and music, movies and books are still basically free as long as you have a desktop, laptop, or friends.

So you are a minority in terms of app purchases (of ipad owners) and believe it's ok to steal media. Cool story.

Re:Who's buying? (-1)

Anonymous Coward | about a year and a half ago | (#41893883)

So you are a minority in terms of app purchases (of ipad owners) and believe it's ok to steal media. Cool story.

And your shit smells like roses right?

Re:Who's buying? (0)

Anonymous Coward | about a year and a half ago | (#41893855)

I like a lot of authors. As an example, Charles Stross. I'd like to see him compensated for his work.

Re:Who's buying? (1)

Kabloink (834009) | about a year and a half ago | (#41893887)

I tend to purchase the paid version of any app I use on a regular basis. The money spent helps support the developer and hopefully leads to continued updates of the app.

Re:Who's buying? (1)

viking099 (70446) | about a year and a half ago | (#41894069)

I happily pay to keep extra 3rd parts ads out of the applications I use regularly.

Also, if you're of the kind of user that has no qualms about copying a friend's movie/music/book library, then I wouldn't expect you to be terribly enthusiastic about paying for apps unless there was an extremely compelling reason.

For me, I prefer to pay for the things I use and enjoy. I committed to being above-board with my personal media choices back when the first lawsuits first started coming out way back when.

I'll still media shift and break DRM to consume my media as I want to, but I'll at least do what I feel is the right thing by starting out with a legitimate copy.

premium (0)

Anonymous Coward | about a year and a half ago | (#41893737)

Premium works to a point. There is even a market for it. Mass market though is a bit more cost sensitive... For example Sony had what some would argue is the best box in the last gen of game hardware. But they sold it at a 2x premium over everyone else. That cost them dearly in both market share and developers. For example the netbook craze. It wasnt that everyone wanted a netbook. It was everyone wanted a very cheap very portable computer. Tablets are filling that niche now as they are more portable. Eventually though cheap probably will win.

Design Costs (2)

lazarus (2879) | about a year and a half ago | (#41893781)

Interesting, but until you compare the design costs of each device, you can't make a statement about whether or not the price is a fair one. These things don't just spontaneously arise.

Re:Design Costs (1)

SleazyRidr (1563649) | about a year and a half ago | (#41894059)

Yeah, I was wondering how they accounted for design costs and QA/QC in their teardown.

Why are you surprised? (0)

Anonymous Coward | about a year and a half ago | (#41893789)

Apple is the most valuable company in the history of the world.

I think they know a little something about how to make money.

Re:Why are you surprised? (0)

Anonymous Coward | about a year and a half ago | (#41894095)

Apple is the most valuable company in the history of the world in terms of market capitalization and ignoring inflation.

FTFY. Feel free to search who's the winner taking into account inflation (M....$..t) and who's the even bigger winner out of the market in the history of the world (this one I do not know, but I'd suspect ARAMCO or maybe one of the India Company. ARAMCO is certainly more valuable than Apple though)

The value the Standard Oil would have today is also widely arguable ...

Your second point stand though, Apple does know how to make money.

Only if software costs nothing... (1)

Archeopteryx (4648) | about a year and a half ago | (#41893791)

...Amazon has a very low cost of ownership for Android, after all. Apple wrote the vast majority of iOS.

Re:Only if software costs nothing... (2)

wonkey_monkey (2592601) | about a year and a half ago | (#41894147)

Apple wrote the vast majority of iOS.

Wrote, past tense. It's not like it costs them any more for each tablet sold.

Re:Only if software costs nothing... (1)

Archeopteryx (4648) | about a year and a half ago | (#41894349)

If long term maintenance of existing products were free, I would be a pauper.

Re:Only if software costs nothing... (1)

v1 (525388) | about a year and a half ago | (#41894605)

Wrote, past tense. It's not like it costs them any more for each tablet sold.

And that point is easily offset by the very large cost for development. It may have cost Apple half a million (or more) to write all the software on that device. So it's not reasonable to charge on either end of the cost spectrum, from free to very expensive. So they assign a cost to it (and use that figure to mark up the hardware) by guessing how many copies/licenses they can sell at $x. Just because software is cheap to copy doesn't mean it's cheap to develop in the first place. (or to maintain for that matter)

An important part of the cost of any CPU-using device is the cost of the development and maintenance of the software that runs it. An ipad without software is about as useful as a car without an engine.

Duh. Apple = Hardware, Amazon = Content (-1)

Anonymous Coward | about a year and a half ago | (#41893801)

The Anti-Apple routine here at Slashdot is getting very, very old. Well of course Apple charges more. They make the majority of their cash on hardware (although the App and iTunes stores are pretty lucrative too). Amazon is *all* about the content. So their goal is to get you to buy a Kindle by any means possible so they can make money on content sales. Apple's goal is to entice you to buy their hardware - if you don't buy anything in the store, no big deal they've made their money. Anything extra is gravy. The Kindle and iPad have different use cases & marketing models and are priced accordingly.

Now you wanna complain? Why does Microsoft make more than $250 on every Surface Tablet ? (Guess: because they actually don't expect to sell many)

Re:Duh. Apple = Hardware, Amazon = Content (2)

tgd (2822) | about a year and a half ago | (#41894023)

The Anti-Apple routine here at Slashdot is getting very, very old. Well of course Apple charges more. They make the majority of their cash on hardware (although the App and iTunes stores are pretty lucrative too). Amazon is *all* about the content. So their goal is to get you to buy a Kindle by any means possible so they can make money on content sales. Apple's goal is to entice you to buy their hardware - if you don't buy anything in the store, no big deal they've made their money. Anything extra is gravy. The Kindle and iPad have different use cases & marketing models and are priced accordingly.

Now you wanna complain? Why does Microsoft make more than $250 on every Surface Tablet ? (Guess: because they actually don't expect to sell many)

Apple is more of a media company than Amazon is. By a long shot. And "anything else" is not gravy for Apple. Its the sole reason for the devices existing, and the sole reason they have to justify their stock price to investors.

If people wouldn't pay $500 for an iPad, Apple would be selling them at cost, just like Amazon. Amazon doesn't have the brand clout Apple does. The Amazon name doesn't automatically add $200 in value to the product. You better believe, if Amazon could get away with $500, they would. And if Apple couldn't, they'd still be selling the iPads.

Re:Duh. Apple = Hardware, Amazon = Content (1)

afidel (530433) | about a year and a half ago | (#41894547)

Yep, when the ipod first came out it retailed for less than the 1.8" drive that was embedded in it, Apple was definitely in it to grow marketshare and build up the itunes ecosystem. It wasn't until much later that the brand had enough power to push up hardware margins.

Dumb (1)

mike260 (224212) | about a year and a half ago | (#41893827)

1. The OS and online infrastructure costs $0?
2. Selling a product at a profit equates to "premium" now?

Re:Dumb (1)

geekoid (135745) | about a year and a half ago | (#41894429)

Depends on how much profit the sell it for.

Re:Dumb (1)

tepples (727027) | about a year and a half ago | (#41894435)

I thought the developers paid for the online infrastructure with the $99 per year and 30% of purchase price.

How much donated to FreeBSD for each sale? (1)

Andy Prough (2730467) | about a year and a half ago | (#41893897)

You know -- for the FreeBSD project providing all that free coding that helps pay for those gigantic bonuses?

Re:How much donated to FreeBSD for each sale? (1, Interesting)

Anonymous Coward | about a year and a half ago | (#41894107)

I always enjoy people who don't understand the motivations behind people who release stuff with the BSD license. Hint they don't do it for the money.

Re:How much donated to FreeBSD for each sale? (1)

Andy Prough (2730467) | about a year and a half ago | (#41894259)

Hint they don't do it for the money.

Neither does Apple.

...Wait - what???...

iPad. Now brought to you by Coca-Cola(TM) (1)

Oceanplexian (807998) | about a year and a half ago | (#41893921)

Apple is a hardware company, Amazon is not. They both have different motives and you can clearly see it reflected in their products. With the Kindle and other tablets sold at a near-loss, vendors have an incentive to shove advertising in your face. Everyone will likely complain that the iPad mini is overpriced and shame on them for making a profit.

The truth of the matter is that Amazon is just repeating the commodity PC bundleware strategy. I'd rather pay a little bit more to support a company that doesn't subsidize it's products with advertising.

And the point is? (2)

Grayhand (2610049) | about a year and a half ago | (#41893947)

If I was Apple I would have set the price at $250 and lived with little or no profit and counted on iTunes sales. The point is Apple has always taken the stance that they are a hardware maker not an OS or even a software and music retailer. Those are considered sidelines. It's one of the reasons their hardware has always cost more but they sell their OS dirt cheap. I don't know the profit margin on a Fire but say Apple is pulling 30% or 35%. It's high but not out of line with some products and no one ever wants to factor in development costs. Yes it's a downsized iPad but there's still tooling and design costs. Overall they are making probably 25% without advertising. Oops there's that cost and Apple loves to advertise. I have no idea the final cost once you add in distribution and advertising and all the other expenses. I'm sure they are easily making 15% or 20% pure profit. It's a health profit but that's what a company in their position should make, a healthy profit. The companies have to make money somewhere but everyone says they don't want to pay much for music, movies, games and software so where exactly do you build in profit? Everyone else is playing catch up so they have to sell near or at a loss but so long as Apple products are selling well they have no incentive to cut out the profit margin. Sure they are making a profit on every step but that's what companies do, make money. At least they are making a solid product. One of the reasons Microsoft got into so much trouble is they became dependent on a couple of products then started turning out crappy products and said so what? We have a monopoly in PC OSs and office software so what are you gonna do about it? Well over the last five or so years a lot of people switched to Apple. Apple's evil? Here's a revelation, corporations are evil! They exist to make money not to make you happy. They want to make their investors happy. As much as I would like to see Apple products cheaper I don't want to see them cut quality to do it. Little things like the metal instead of plastic cases on the pad devices. The iOS is elegant and fun to use once you get used to shoehorning your personal content onto them. I'd love to see them more open but it would come at a sacrifice of stability so I'm happy the way things are. In the end if you want a device with zero profit margin then buy Android. If you want iTunes then you're talking an Apple device and deal with them making a profit.

Re:And the point is? (1)

Internal Modem (1281796) | about a year and a half ago | (#41894267)

I agree Apple views itself as hardware. I think Steve Jobs' 1997 termination of licensing deals other manufactures had to make Macintosh clones signaled Apple was a hardware company. Their prioritization of hardware is also apparent in their problem delivering content and services (Mobile Me, IOS 6 Maps, iTunes Match, Siri) beyond their success with UI/UX.

Re:And the point is? (0)

tomhath (637240) | about a year and a half ago | (#41894341)

If I was Apple I would have set the price at $250 and lived with little or no profit and counted on iTunes sales.

Why? Apple buyers will buy Apply products, they have no other choice. The higher price makes the product a status symbol. Marketers! Marketers! Marketers!

Re:And the point is? (0)

Anonymous Coward | about a year and a half ago | (#41894423)

I just love how all the /. rise up to tell Apple how to do its business.

I dont see any of you with the largest company in the US. And one of the biggest in the world. I do see Apple with this.

I suspect most of you act on advise from those like /, for financial matters.

It is no wonder you not improving your financial status in the world. /silly /.'s

More is Less (1)

sl4shd0rk (755837) | about a year and a half ago | (#41894109)

*No HD movies, less PPI, mono sound. Not to mention the handcuffs. No thanks.

http://news.cnet.com/8301-1023_3-57541838-93/amazon-pits-kindle-fire-hd-vs-ipad-mini/ [cnet.com]

Re:More is Less (1)

Anonymous Coward | about a year and a half ago | (#41894211)

mono sound is false. it's actually the first ipad with stereo sound

Re:More is Less (0)

Anonymous Coward | about a year and a half ago | (#41894579)

Seriously? Ipad has been mono until now?! What a piece of garbage. Hmm, stereo sound has been out how many decades, and they have saved what with keeping it mono? Frieking unbelievable!

So what? (0)

Anonymous Coward | about a year and a half ago | (#41894123)

That's what happens when you have a competitive advantage, market share, brand, vertical integration, etc.

Apple has to pay (0)

Anonymous Coward | about a year and a half ago | (#41894205)

for someone to manage all those slaves...
slave master outside of the sex industry is not a popular job...

It matters not. (1, Insightful)

sootman (158191) | about a year and a half ago | (#41894249)

I can give $20 worth of ingredients to my neighbor (he's a chef) and the same to my kid, but you'd be a fool to think that you'll get two meals of comparable value from them.

Re:It matters not. (0)

Anonymous Coward | about a year and a half ago | (#41894609)

Yeah but your kid will make you steak-and-ice-cream sandwiches - priceless!

I talked to Adam Smith about this (1)

daboochmeister (914039) | about a year and a half ago | (#41894497)

He said not to worry, it'll work itself out. Then he slapped me with his invisible hand (i think ... i'm pretty sure) for getting in a tizzy about it.
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