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

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."

Comments

Few things

[SquarePixel]

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

[garcia]

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.

Re:Few things

[jellomizer]

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

[beelsebob]

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

[retchdog]

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

[Anonymous Coward]

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

[beelsebob]

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

[ignavusinfo]

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

[NatasRevol]

Look at all the businesses fleeing the PC market.

Re:Few things

[mike260]

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

[Anonymous Coward]

Translation: We made some decisions that cost more, but allow us to deliver a superior experience. If that's not your cup of tea, feel free to buy an Amazon tablet where all the design trade-offs were made to allow it to be produced cheaply, and is being sold at cost because they can lock you into buying content from them in order to make their money on the back end.

Re:Few things

[gnasher719]

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.

Strange what you say there, considering that MacOS X is actually POSIX certified, and Linux for obvious reasons isn't. If you want Linux, use Linux. If you want Unix, Linux isn't Unix. Never was. Never will be.

Re:Few things

[Fallingcow]

You're not going to be deploying any of that code on OSX, your target is almost always going to be Linux. So why not just develop on Linux?

Commercial programs without using WINE, rock-solid features—sleep/wake rarely-bordering-on-never breaks, hardware all works well, GUI never shits itself and shuts down, updates don't break your wireless, etc.—some gaming available without tons of dicking around to make it work (or you can boot to Windows in either case, obviously), *nix shell, high-quality displays, great power management, and so on.

Linux is for tinkerers, VM jails, and servers.

I ran Linux on the desktop/laptop for years, including Gentoo for a long stretch. It's a fucking pain in the ass, and if you aren't having problems it's because you've been damn lucky. You don't want to be the guy who can't get shit done because X decided you can go fuck yourself, or an upgrade broke wireless, or you need to give a presentation and your HDMI out is doing weird things or simply not working, even though it works on your monitor at home, and so on.

It's kind of like the whole "no one got fired for buying IBM". OSX works more often and more smoothly, and if it doesn't no-one blames you. Anyone who doesn't get a bit nervous when they need to use their Linux box in unfamiliar/untested settings or circumstances probably hasn't had to do it very often and therefore doesn't realize that they have very good reason to be nervous about it.

Re:Few things

[samkass]

And the obvious point: Apple is selling all they can make right now. Supply and demand would dictate Apple should be charging even MORE, but price is artificially low so people don't start associating the product with an even higher price later on.

Re:Few things

[Dr. Evil]

Google's locked you into their services, your data is being mined and your eyes are being sold to advertisers. That was their plan.

Re:Few things

[Tough Love]

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.

Strange what you say there, considering that MacOS X is actually POSIX certified, and Linux for obvious reasons isn't. If you want Linux, use Linux. If you want Unix, Linux isn't Unix. Never was. Never will be.

A grain of truth always makes for better fud and rubbish, hmm? Vendors of Unix-like systems such as Linux and FreeBSD do not typically certify their distributions, as the cost of certification and the rapidly changing nature of such distributions make the process too expensive to sustain.[18] So... FreeBSD, commonly considered "real Unix" (directly descends from the Bell Labs code base) is not Posix-certified? What does that tell you about Open Groups pricey rubber stamp? Here is the truth: FreeBSD and Linux conform well to Posix, both take binary compatibility and source compatibility very seriously, and together lead the way in evolution of Unix. While not carrying the rubber stamp. That is life in the real world.

Why is this said with any implication of surprise

[jeffmeden]

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

[vlm]

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.

Luxury Devices

[fldsofglry]

This seems to come up a lot. Apple is overprice, apple is overpriced. Perhaps they are just the "luxury" devices of the computer world. I feel this applies to cars as well, but I don't see people posting that Lexus' or BMW's are overpriced. A Ford Focus gets me from point A to point B just as well as a Benz, but the perceived quality and status symbol of the Benz helps keep prices high. Hell, I had a Nissan that has gone 235,000 miles at a much lower price than "luxury" cars. So Apple charges more than other device retailers/manufacturers? Why is this surprising? So does BMW and Lexus compared to Fords and Chevy's.