Friday, February 23rd 2007
What Your Gadget Really Costs
Ever wonder how much profit companies are making on your purchases? Have you considered building products from parts, and saving a lot of money? Or are there some things where the company selling the product is at a loss?
Business Week has posted an article about how much profit or loss companies like Microsoft, Sony and Apple are making on their products - definitely worth a read here.
While Apple seems to be making a profit on all of its products, Microsoft and Sony are both at a loss with their gaming consoles - we must remember, however, that most of the money will come from the games purchased for the consoles.
Business Week has posted an article about how much profit or loss companies like Microsoft, Sony and Apple are making on their products - definitely worth a read here.
While Apple seems to be making a profit on all of its products, Microsoft and Sony are both at a loss with their gaming consoles - we must remember, however, that most of the money will come from the games purchased for the consoles.
8 Comments on What Your Gadget Really Costs
Hell, they list the 20GB hard drive for the PS3 as costing $43. Sony would be better off going to Newegg and buying 40GB drives for $46 and doubling the storage capacity for virtually no cost increase.
They don't have a clue what Sony is paying for its parts. I don't believe they are making a profit on each console, but I certainly don't believe the loss is anywhere near $300 per unit. The same goes for all the other products they analyze.
www.isuppli.com/news/default.asp?id=6919
You can see there, they aren't estimating how much it costs a regular person to put these components together, they are estimating what it costs Sony and how much they are losing per console but they are using near retail prices for a lot of the hardware.:shadedshu
I also highly doubt it costs sony $125 to build a blu-ray drive, the basic components aren't that much different than your $25 DVD-Rom. I highly doubt Sony is paying anywhere near $125 per Blu-Ray drive, especially since they are making them themselves. The high price of new technology is usually always due to the price of developement, but the actual parts and labor probably amount to less than $50 to actually make the drive.
We can agree that Sony is losing money on these thing, I just think it is ridiculous to believe these reports of Sony paying near retail prices for some of the parts. No one but Sony has any clue what they are actually losing per console, my guess is that these reports are drastically overestimating what Sony is actually paying for their parts, the fact that they claim near retail prices for some is proof of that.
But again, I am just guessing, just like isuppli and anyone else is. The only people that really know are the people that run the books at Sony. Personally I refuse to believe anything that isuppli says, they are about as reliable as The Inquirer. If they can't even get how much Sony is paying for their Hard Drives right(and it is obvious that they are way off on that number) then I can't trust any other numbers they put out either.