4 million in 2 quarters, projected out, actually gets you to 12 million by the end of 2008-- well above 10 Million target. Recession or not, I think they'll beat 12 Million.
I agree with your, Carl. It would be brain-damaged to cut the price of the phone. People conceptualize cell phones as "free"; I see a high-end iPod with advanced Internet and phone capabilities. And I understand iPods are not "free".
Carl -
This is the sort of analysis that keeps me coming back. Excellent work.
Regards,
Chris
For the most part, I see news/analysis from the thestreet.com as nothing but a tool to manipulate or influence stock prices. I remember seeing a video of Cramer admitting to this.
The Silicon Alley Insider article, which references Gizmodo, says a new iSuppli teardown analysis estimates Apple 40GB costs about $208. Your $237 price is the old tear down. Component costs have dropped a little.
The processor is a big unknown, but the analyst also said it is probably not more expensive than they have assumed. iSuppli breaks down the costs of the components or Bill of Materials. Your comparison to an Intel mini-ATX is a bit over simplified since Apple TV is a compact, custom motherboard.
I could only find a link to old Apple TV analysis with Bill of Materials where cost was estimated to be around $237. It breaks down the costs of the major components.
iSuppli Apple TV teardown from June 2007:
http://www.isuppli.com/news/defa...7992&m=6&
y=2007
Image of just the Bill of Materials for Apple TV from iSuppli:
http://www.isuppli.com/images/
ne...607_appleTV.bmp
TheStreet.com is a hack website, particularly Scott Moritz.
@TomB
The 10m target is for calendar 2008. Sales made in 2007 wont count towards that target.
I agree with you about the product prices to an extent. Apple faces a difficult road ahead and is relying on its subscription services as its primary revenue generator. Remember Apple gets $7 a month per iPhone and god knows what they get on average through iTunes.
On the campus they dedicate more and more people to iTunes and iTunes related issues.
Your analysis is wrong and based on dying business models. Apple would benefit from price drops as it operates more as a phone company now. They want your money and you on a contract and will likely subsidize hardware just to get you roped in to their services. Look at the phone industry, media, and gaming models. This is the new market and though Apple will be reluctant to reduce prices, the collapsing economy may force them to.
Competing companies like Asustek- specifically their Eee family launch will force a price drop. Consumers will prefer customizable goods for less money. Say hello to Android and the Eee Factor.
Please don't dignify TheStreet or waste our time by responding to anything they write. You debase yourself in doing so and leave us with a feeling we have not spent time beneficially reading your commentary. The Inquirer is in the same category.
Unfortunately iSuppli can only make estimates. An estimate is never an ACTUAL. It's a guess.
Apple has a recorded history of negotiating good deals for itself - so it is quite easy to believe that iSupplis estimates are inflated.
The Eee PC is intriguing - but the only people I know of buying one are from the Tech world. It's aimed at the masses - but I wouldn't buy one for Grandma. The Eee PC will gain ground when Linux does. I can't see that happening. (As much as you would like it to.)
Thanks Carl! Great article per usual!
Apple will never follow the Peggy Bundy School of Economics (Motorola) …. Margins Matter! If you have healthy margins, as Apple does, you have ample room to maneuver on price or biz model (if necessary) and still deliver significant revenue to the bottom-line.
Great to see you haven't completely quit posting to this blog. Do you have any comments on all the recent gloom and doom being disseminated by some of the tech press regarding the allegedly huge number of iPhones that have been unlocked?
RJay - FWIW
http://idannyb.wordpress.com/200...massive-demand/
Nice analysis Dan. It aligns well with the recent story at the NY Times website that cited anecdotal evidence that a huge number of unlocked iPhones are showing up in many Asian countries, Russia, the Philippines... and selling for premium prices.
Seems to me that much of the tech press is trying to generate news rather than report it.
Darren,
"The 10m target is for calendar 2008. Sales made in 2007 wont count towards that target."
Actually, Apple has consistently said "by the end of 2008" — while they say "it's only 1% of the market" (indicating a yearly view), they've thus far left themselves open to consider the 10 million mark in total sales of iPhones since launch.
Commenting by HaloScan
