How Much Does Apple Make On The iPod Shuffle?
from the taking-it-apart dept
While there were a few fan websites that quickly disassembled the new iPod Shuffle soon after it came out, one research firm has done so in an attempt to figure out just how much Apple is making off of these devices. After examining the pieces, they found that the Shuffle components probably cost about $60, meaning Apple is getting lovely 40% margins. While this ignores things like marketing expenses, it's not bad for hardware -- and as the article notes, the priciest piece (the flash memory) is only going to get cheaper. Of course, this also means that there is likely to be much cheaper competition hitting the market soon, but (so far) Apple has been able to convince people that they're worth the premium by having a superior interface, close integration with the iTunes store and a general premium for "style."
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Reader Comments
Subscribe: RSS
View by: Time | Thread
Pricing
I asked how they could charge so much, and the answer from the company president was "It's all in the perception of the consumer."
[ link to this | view in chronology ]
Re: Pricing
As I tell my students, price and cost have very little to do with one another. Cost is money needed to build a product. Price is what people are willing to pay. Price exceeds cost? Great! You get to keep the difference. Cost exceeds price? Then it's a bad product, and generally raising the price won't help.
[ link to this | view in chronology ]
It's the Software
The first two were enough for most users and the premium being paid is less and less. It really is less of a style issue than it used to be.
Two close acquaintenances (brother & friend) are hardcore windows (bordering on 'we hate apple') kinda guys and after being exposed to the itunes store and the Ipod both are now owners and believers.
Sometimes you have to Drive the Jaguar to understand why it is so much better than say ... a corvette.
[ link to this | view in chronology ]
Re: It's the Software
Secondly, as far as the second poster's PC loving friends now being 'believers,' that's scary. It's one thing to say they bought an iPod and now like it, but to refer to them as 'believers' just supports the feeling that Apple fans are like a religious cult - they'll accept anything Apple sells them with open arms and little criticism.
Honestly, the Shuffle is a joke. There is no revolutionary interface on it and the device is so simple it's no better or worse than a myriad of flash players already out there.
Actually, of course it's worse, there is no screen! They could have easily included one, since other players at the same price point offer one (and with more features, such as FM and voice recorder).
But Apple, in their quest to make more profit on every unit, left out any extra features, including the screen, and decided to try and market it as a selling point. The whole "life is random" thing is retarded, it's just a way to justify them saving $5 extra on the manufacturing of each unit.
So other flash players cost maybe $50 to make and they sell for $100, while the Shuffle probably costs $30 and sells for the same price. Smart on Apple's part, but it's not revolutionary.
[ link to this | view in chronology ]
Re: Re: It's the Software
[ link to this | view in chronology ]
Re: It's the Software
[ link to this | view in chronology ]
Think first (and last)
[ link to this | view in chronology ]
iPod Shuffle's superior interface...
You can't help but say that since their marketing blitz has said it and apparently convinced droves of people... but the "superior interface" is... not having one (not having controls)?
As it has been observed:
"If less is more, imagine how much MORE would be!"
[ link to this | view in chronology ]
Re: iPod Shuffle's superior interface...
Save 11 cents by going to walmart and download a song there and see if the 11 cents is worth it.
And since when did making a profit become an evil thing ?
Believer != cult. Simply that the reality lived up to the hype.
I'm not religious about the Mac. I took the long road to get there. DOS, Amiga, Win 3.1, Win95,Linux, ...and after suffering enough decided the apple premium was worth it. Have seen nothing in the Windows world that made me want to switch back (yeah, those Dell great deals are inticing but seldom what they seem) and with Apple lowering it's price points, it's easier and easier to stay on this side of the fence.
Price and Mantra are no longer the issue when choosing your PC or Music player. It's what works best for you (to include how much you're willing to pay).
[ link to this | view in chronology ]
Re: iPod Shuffle's superior interface...
So you,re saying that you would rather pay a premium for an operating system that is less compatible with the rest of the world.
Apple thanks you for your support.
[ link to this | view in chronology ]
Re: iPod Shuffle's superior interface...
[ link to this | view in chronology ]
Re: iPod Shuffle's superior interface...
[ link to this | view in chronology ]
Re: Re: iPod Shuffle's superior interface...
[ link to this | view in chronology ]
Re: iPod Shuffle's superior interface...
[ link to this | view in chronology ]
Re: Re: iPod Shuffle's superior interface...
[ link to this | view in chronology ]
After I purchased a 60GB iPod, I immediately fell in love with it. A shuffle is a waste of money, it is just Apple's cheaper version for those of us who don't want to spend much. I am going well with my current iPod Video, however I'm on my third one!! LoL. The first one I purchased was a lemon, too it home and it wouldn't turn on anymore. The second one.. well I took it back because a DlO case severly scratched the surface and screen of it. Now I have a white one that has been working fine ever since.
If you are considering getting an MP3 player, I'd suggest asking yourself what you want it for.
1) How much music do you have? If you don't have much, consider getting a cheaper NON-Apple MP3 player, that would have a screen (unlike the shuffle) and probably enough space to hold your songs. If you need get the iPod Nano, but Shuffle should never be an option (unless your rich or a collector LoL I guess).
2) What do you want to use it for? iPod Video can keep video, pictures, and text files. So if you think you would constantly be using these features, but it.
3) How often will you be using it? If you are not going to be needed an MP3 player often, get a CD player LoL. It isn't worth the expense if you won't be using it much anyways.
4) Do you have a computer? (Well you should if you are reading this). But many of my friends purchase iPods without even having somewhere to upload songs onto it, so they beg me and others to go over to there homes to use their computers. Ugh! Annoying!!
And some tips. If you are going to buy a Video iPod (since you are even willing to pay that much, like me ^ ^) then hands down get the $50 3 Year Warranty plan. If you are going to pay $400+ for anything you should make sure it is insured. I mean look at my story, I am on my third iPod already and I've only had it about a month!! These things break, scratch, and malfuntion at the poke of a finger (unlike PSP, but memory sticks suck).
I am very happy with my current iPod, and for anyone who doesn't already have too much of a grudge against Apple and is a music freak (like me) get one.
[ link to this | view in chronology ]
ipod shuffle
[ link to this | view in chronology ]
hello
[ link to this | view in chronology ]