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Old 09-10-2012, 12:57 PM   #46
murraypaul
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Originally Posted by Dave_S View Post
Of course, you are correct that to call the figure that was given the actual "profit" is at least an exaggeration and maybe a little silly. However, that number is not diluted by very much
You can find out their actual profit margin from their annual/quarterly reports.
It is nowhere near the 'reported' 272%. It is in fact diluted by very very much.
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Old 09-10-2012, 05:47 PM   #47
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Since Samsung's phones are of a generally higher quality and much higher performance, while being sold at a lower unit cost, would seem to indicate that Apple's realized profits border on the obscene.
Samsung has produced over a hundred phones while Apple has produced 3. They are not "generally" of a higher quality or higher performance, although their new GSIII hardware generally has higher performance. (One can quibble about the software).

More to the point, producing a 100+ models costs a lot more than producing 3 models, while producing models that sell a lot tends to produce a higher profit margin on the phones in general because the fixed costs become a very small percentage of the cost. Every phone you produce has fixed costs, and producing 100+ leads to a lot of fixed costs.
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Old 09-10-2012, 08:07 PM   #48
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All of those factors affect ALL phone manufacturers, not just Apple. That should mean that a manufacturing profit comparison is reasonably fair since all the hidden cost are born just the same by all the competing companies. In fact, Apple has a somewhat unfair advantage in the factors before and after manufacturing because they a have a lot of clout in forcing their way on vendors, dealers and service providers.
Yes, however I was disputing this part of the original article

Quote:
we reach a total of about £176 to manufacture an iPhone that retails at £499. This represents a profit for Apple of £323 per iPhone.
emphasis mine.

Assuming the BOM costing is true as well as the "labour costs, transportation, storage and warranty expenses", that still does not cover all costs which have to be factored into the final price of any product before you could work out a potential profit margin.

I've no doubt Apple make a good profit on the hardware they sell, especially on Macs. However £323 per phone when there's other costs to factor in seems highly unlikely to me.
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Old 09-11-2012, 01:47 AM   #49
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They are not "generally" of a higher quality or higher performance
There is no point in debating with a zealot, so believe what you like.
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Old 09-11-2012, 03:58 AM   #50
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Dave, if you could provide evidence to support your claim that:

Quote:
Since Samsung's phones are of a generally higher quality and much higher performance...
it might convince people. Making such a general claim, without evidence to back it up, is not too convincing. I own both an iPhone and a Samsung Galaxy Tab tablet, and find both to be high-quality products with good performance.
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Old 09-11-2012, 04:11 AM   #51
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Here is what I don't get. Apple charges a premium for their iPhone. They do it because they are in the business of maximising profits, as is their competitors. Most likely they have a team of engineers and business majors doing calculations to find the price point that will maximise said profit. They don't do it out of malice, they do it because if they didn't they would be negligent of their duties. But somehow it seems that some posters believe they are entitled to a $199 iPhone, if that is the case you can probably get one of the earlier models on eBay. Now, if you can afford a $499 or $599 iPhone, go ahead and buy it, if not, don't take up a space in the queue.
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Old 09-11-2012, 04:11 AM   #52
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Dave, if you could provide evidence to support your claim that:
After having worked as an electronic engineer in the cell phone industry since 1996, my evidence is my own knowledge and experience and discussions with colleagues working for some of the other manufacturers involved. I don't expect any Apple zealot to believe anything other than their own opinion, so I think it best to just state my piece and move on. FWIW, I base quality an performance more upon what is actually inside the phone case than on how pretty the phone case is.
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Old 09-11-2012, 04:15 AM   #53
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After having worked as an electronic engineer in the cell phone industry since 1996, my evidence is my own knowledge and experience and discussions with colleagues working for some of the other manufacturers involved. I don't expect any Apple zealot to believe anything other than their own opinion, so I think it best to just state my piece and move on. FWIW, I base quality an performance more upon what is actually inside the phone case than on how pretty the phone case is.
As I say, Dave, I'm certainly no "Apple zealot". I have an iPhone and an iPad, because I think they are good products, but I also have a Galaxy Tab, which I also think is a good product. One can surely acknowledge that both companies make high-quality products which sell well?
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Old 09-11-2012, 05:00 AM   #54
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Here is what I don't get. Apple charges a premium for their iPhone. They do it because they are in the business of maximising profits, as is their competitors. Most likely they have a team of engineers and business majors doing calculations to find the price point that will maximise said profit. They don't do it out of malice, they do it because if they didn't they would be negligent of their duties. But somehow it seems that some posters believe they are entitled to a $199 iPhone, if that is the case you can probably get one of the earlier models on eBay. Now, if you can afford a $499 or $599 iPhone, go ahead and buy it, if not, don't take up a space in the queue.
This!
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Old 09-11-2012, 05:08 AM   #55
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As I say, Dave, I'm certainly no "Apple zealot". I have an iPhone and an iPad, because I think they are good products, but I also have a Galaxy Tab, which I also think is a good product. One can surely acknowledge that both companies make high-quality products which sell well?
I will grant you that both Apple and Samsung ( the leading pair ) make top tier products that are far better than most all of the no-name clones. The difference is IMHO that Apple uses trailing edge technology except where it is easily seen (displays) and Samsung is much more leading edge. That tends to make the Samsung performance better especially in the area of the speed-power product of the device. Samsung also designs almost all the major components of their devices, while Apple just uses COTS (Commercial Off The Shelf). That tends to give Samsung an advantage in performance. But the whole thing that rubs me the wrong way is that Apple builds their devices with almost all trailing edge components but they charge a much higher price for their product than a product built with leading edge components. After saying all that my own product purchasing preference is not Samsung, but some of their smaller competitors. I just love my HTC Sensation 4G, but I do envy the Samsung S3 a bit.
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Old 09-11-2012, 10:59 AM   #56
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The iPhone 4s is 199$ with contract, the galaxy s3 is 198$ with contract. I'm sure the s3 has better specs, but the prices don't seem outrageous. You can get the old iPhone for 0$ with contract. (I don't own either iPhone or samsung).

From what I read, the bigger profit comes largely from the greater share Apple is able to extract from the phone companies. Maybe the phone companies are idiots for giving Apple more money, or maybe they can count.
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Old 09-11-2012, 11:28 AM   #57
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The iPhone 4s is 199$ with contract, the galaxy s3 is 198$ with contract. I'm sure the s3 has better specs, but the prices don't seem outrageous. You can get the old iPhone for 0$ with contract. (I don't own either iPhone or samsung).
The "with contract" price is meaningless, as that is not the actual price that the purchaser pays the manufacturer (via the contract carrier) for the device.
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Old 09-11-2012, 11:57 AM   #58
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The difference is IMHO that Apple uses trailing edge technology except where it is easily seen (displays) and Samsung is much more leading edge.
Couldn't agree more. The prove is in the CPUs (we have quad-core ARM A9s and dual core ARM A15s) and apple is still using dual-core ARM A9s. Then the radios, we've had LTE for 2 years, and yet it's still missing on the iphone. Apple are usually very conservative and don't put new tech on their phones until it is 1 or 2 generations old.
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Old 09-11-2012, 12:14 PM   #59
Andrew H.
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There is no point in debating with a zealot, so believe what you like.
While you are a model of dispassionate rationality?

FWIW, I've been extremely critical of Apple's e-book policies (as you can see from my anti-Apple sig). If I get a little tired of the constant content-free Apple bashing on the forum...well, I guess that makes me a zealot.
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Old 09-11-2012, 07:33 PM   #60
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There have been some negative comments about Apple here, no doubt. But is it "bashing" when the critical remarks are right on the money?

From an objective point of view the only company that really does get bashed in this forum is Microsoft.
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