Motorola Xoom Costs $360 to Build; Sells at $799

[Guest]

One of Apple's key advantages in the tablet market is believed to be the cost of manufacturing the device - volume resource purchase could save Apple a bundle over what the competition has to pay.

Motorola Xoom Costs $360 to Build; Sells at $799 : Read more

 

[dheadley]

wow, I always thought Apple was the one with the huge mark-up and over priced gadgets.

 

[fracture]

It's not just about price comparison, it's also about what they have inside the gadget. And Apple products don't have much for what they sell for.

 

[abswindows7]

The cost estimation doesn't cover the customer service, the returns % fees, the marketing ads, the assembly cost, the fee to run chinese 24/7, the price it cost per month in electiricy etc...

 

[burnley14]

[citation][nom]abswindows7[/nom]The cost estimation doesn't cover the customer service, the returns % fees, the marketing ads, the assembly cost, the fee to run chinese 24/7, the price it cost per month in electiricy etc...[/citation]
Don't forget R&D. That's a huge cost for products that are venturing into an untapped market.

 

[Guest]

*sigh* Here we go again.

The cost of a piece of equipment is not just the cost of its materials. It includes assembly, shipping, accessories, your share of the R&D and software/OS development costs (which can run to hundreds of millions of dollars or more), per-unit license costs and patent fees, approvals costs, legal costs, packaging, marketing (which every engineer "knows" is a waste but the real world dictates otherwise) and... oh, yeah, the hardware bill of materials.

You think you can do better than Apple, Motorola, Samsung, etc.? Go for it. If you're as good as you seem to think you are, we'll see you at your stunning IPO.

 

[rohitbaran]

Apple's tablet is cheaper. Point taken. But their earnings come from the app store purchases that iPad users do, for Apple levies a hefty 30% tax on every app on app store. This business model is similar to printer and toner model.

 

[squanto]

You mean, "Motorola Xoom Costs $360 to Build; doesn't sell at $799"

 

[Guest]

Apple's markups are bigger on the more expensive MAcbook Pro's and such. In fact Apple has even mentioned that their profit margins would shrink due to a product intro. At the time that product was the first iPad. Apple knows that it can gain back some of that with Apps. I think the Xoom has been marketed with the best margins in mind. That is why it did not offer a Wifi only version. The WiFi only version is probably Apple's lowest margin product too for the iPad.

 

[stoogie]

Apples iphone4 is $180 to make and sells at $850, now compare that to this $360 to make and sells at $799, now whos the worse company?

 

[robochump]

[citation][nom]Stoogie[/nom]Apples iphone4 is $180 to make and sells at $850, now compare that to this $360 to make and sells at $799, now whos the worse company?[/citation]

There is more than 1 model of iPhone BTW.

 

[Usersname]

No one here question the profit margins MS make on its OS and cheaply made Chinese sourced OEM parts? Makes Apple look quite the philanthropist.

 

[mrmez]

Everyone who has no idea how pricing works thinks that is a massive markup.

The "bill of materials" is only a tiny part of the process... you need to add: R&D costs, packaging and distribution, marketing, licencing and patent costs, retail store profits, an amount for warranty, and after all that Motorola want some profits too. Just to name a few.

 

[jmchien]

$850 US for iPhone 4? Are you looking at an unlocked iPhone sold in Thailand?...

 

[aaron88_7]

And music CDs cost about 10 cents to produce....this argument has been had many, many times before!

 

[joshyboy82]

I like how the Xoom pictured says zoom below it. I drew in the parenthesis in my mind.

 

[Zingam]

I have a theory. These prices for these devices are way to high.
I think that they keep the current levels for one reason only. They want to rip off the Americans first. When all Americans get one at a high price they'll eventually want to expand into other markets and then they'll need to drop the price because only a few people outside US will pay so much for so little.

 

[Zingam]

[citation][nom]LR[/nom]*sigh* Here we go again.The cost of a piece of equipment is not just the cost of its materials. It includes assembly, shipping, accessories, your share of the R&D and software/OS development costs (which can run to hundreds of millions of dollars or more), per-unit license costs and patent fees, approvals costs, legal costs, packaging, marketing (which every engineer "knows" is a waste but the real world dictates otherwise) and... oh, yeah, the hardware bill of materials. You think you can do better than Apple, Motorola, Samsung, etc.? Go for it. If you're as good as you seem to think you are, we'll see you at your stunning IPO.[/citation]

Oh, come on this crap costs more than PS3 when it has been released initially Yeah, it was subsidized but even so these tablets are more expensive for much less. PS3 also has R&D and Sony doesn't use standard available parts to build it like these guys do.

 

[voliveira]

I think if companies would stop thinking about 6month return on products I bet you they could be a lot more aggressive with prices and build huge customer bases. Apple was 1st around and 1st to build that customer base that why its so easy to keep cost down. If coming in to the market now you need to set your returns a lot more than 6months to be competitive and blow Apple out water.

 

[house70]

they need to change their name to iMoto.