Quote:
Originally Posted by Kris777
B&N sell Nook for $259 but what is the cost of components (screens, memory, CPU etc)? It looks like cost must be more than $259...
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iPad isn't directly comparable of course.
But analysts claim to have done an analysis. About 50% Gross Margin for Apple there. And the screen is bigger, touch enabled, ... (another technology of course).
So, given B&N's (assumed) sales figures), I'd expect a Gross Margin in the range of 30%.
This still may seem a lot. But considering overhead, R&D, taxes, ... this only would be roundabout flat. But I guess, this would be absolutely fine. Personally, I've bought about 100 eBooks from B&N in the roundabout 6 weeks I own my nook now.
100 eBooks = $ 1000, which generates a profit of, let's assume, 30% at least?
Obviously, profit for Amazon, B&N, Apple and the likes is in the content, not in the hardware.
And that's the reason of course, why they can go for low margins on the units, as opposed to purely (or at least mainly) hardware driven companies like iRex, Bookeen and similar.
BTW: I don't think though, that any of those companies take a loss on the hardware. But probably it won't be a huge profit either.