Mac News Network View: Standard | Headlines | Categorized | Slim
Mac News Network
Mac News iPod News Reviews Forums
Apple Stock Quote: 205.88 ( +5.96 )
 



RSS/XML Feeds | More



Desktop Headlines
Mac mini generating low profit margins for Apple
Friday, June 26, 2009 @ 3:25pm

The latest Mac mini, at least in its entry-level design, is not an especially profitable product for Apple, says the analysis firm iSuppli. In conducting a new teardown of Apple's cheapest desktop, the firm notes that the bill of materials is estimated be $376.20, a little less than $223 below the retail price. Adding manufacturing brings costs up to $387.14, and the company must also pay for expenses such as licensing, marketing and shipping.

One of the greatest expenses is said to be the 2GHz Core 2 Duo P7350 processor, estimated to be worth $118.35. By contrast, the GeForce 9400M graphics chip costs $65.16, and the 120GB hard drive is worth $46. The included optical drive is worth only $32. All together the system still is more expensive than it might otherwise be, as a result of an Apple insistence on keeping the system small through the use of notebook parts.

iSuppli observes that the computer also consumes more power than one might expect, requiring a 110W external power supply as opposed to the 85W component provided for the original Mini. The new system does use tightly efficient circuitry however, and can consume as little as 13W when idling. The system thus earns its environmental credentials, says iSuppli.

Comments on this Article
Print Friendly Version
Email to a Friend
Add MacNN to Your RSS Feeds
Buy from the Apple Store


Related Stories:

Today's MacNN Stories:
  • Android, Chrome OS expected to unite - 6:20 PM EST
  • Report: iPhone slowly gaining momentum in enterprise market - 6:15 PM EST
  • HP's 3rd quarter results hurt by budget PCs - 5:30 PM EST
  • Sony recorders capture 1,072 hours, play MP3s - 5:20 PM EST
  • Mimo intros lowest priced touchscreen monitor - 5:00 PM EST
  • Jumsoft outs Keynote Themes FX 5.0 - 5:00 PM EST
  • Airfoil Speakers Touch update restores product graphics - 4:40 PM EST
  • Creative intros 3rd-gen Vado HD with better video - 4:25 PM EST
  • Samsung STORY gets 2TB version, eSATA - 4:20 PM EST
  • New iPhone ads highlight Verizon's network drawbacks - 3:55 PM EST
  • Google Maps Nav hits Android 1.6 ahead of iPhone - 3:50 PM EST
  • Ableton Max for Live designs custom add-ons - 3:40 PM EST
  • AT&T offers up short-term data passes - 3:10 PM EST
  • Intouch shows IT7150 wireless Internet photo frame - 2:25 PM EST
  • Malicious worm targets jailbroken iPhones - 1:45 PM EST
  • Schiller responds to App Store approval criticisms - 1:30 PM EST
  • Early Core i9 tests show up to 50% boost - 1:25 PM EST
  • PC shipments to climb 2.8 percent this year - 12:20 PM EST
  • Apple Black Friday deals leak online - 11:50 AM EST
  • iPhone now 50% of all smartphone traffic worldwide - 11:10 AM EST
  • Best Buy cuts Mac prices ahead of Black Friday - 10:55 AM EST
  • Korean iPhone launches Nov. 28th; prices revealed - 10:20 AM EST
  • Data Robotics rolls 5-bay Drobo S, DroboElite - 9:40 AM EST
  • Apple hints at November 27th online sales special - 9:00 AM EST
  • Dell phone in China; iPhone retailers intimidated? - 8:30 AM EST
  • London Apple Store leads UK retail, triples Harrods' profits - 1:30 AM EST

    Today's iPodNN Stories:
  • Nintendo intros paid video service for Wii in Japan - 4:40 PM EST
  • Spotify app launches for Symbian phones - 4:35 PM EST
  • TomTom discounts two budget GPS units for Black Friday - 11:15 AM EST
  • LG outs first netbook in the US, adds AT&T 3G - 10:15 AM EST
  • Samsung Omnia II official for Verizon Dec. 2 - 10:00 AM EST
  • Reader reaction
    Found 15 comments

    And in other news. . .

    258043

    The latest Ford Focus, at least in its entry-level design, is not an especially profitable product for Ford, says the analysis firm iSuppli.

    Who pays these guys to state the obvious?

    Comment posted by: Glenstorm

    lol not news

    258046


    Seems obvious the Mini is not a massive profit point for Apple.

    As time goes on and the component prices come down, Apple will make better money off of each Mini.

    Comment posted by: DeezNutts

    Seems high

    258049

    "120GB hard drive is worth $46"

    You can get a 160GB drive from New Egg for $40. I'd bet 120GB drives in lots of 1,000 are considerably lest than $46.

    Comment posted by: dwesnor

    Koolaid

    258051

    Don't know what the guys at iSuppli were drinking when they wrote this one but a number of the figures including the cost of both optical and hard-drive are hogwash, pure and simple. On the basis of their inflated figures Apple nonetheless has a gross margin of nearly 70% which is twice what Dell have before all that "cost of sale" sh1t. Don't go shedding any tears for Apple just yet.

    Comment posted by: Feathers

    it's still a profit

    258053

    Agreed dwesnor - they are buying in bulk- Instead of dollars how about %? I mean they can't really make it 9,000% markup but anything over 15 or 20% seems ok profit to me.

    Comment posted by: sharp3d

    40% profit margins

    258054

    Apple's profit margins are typically estimated to be around 40% and these numbers are in line with that.

    Comment posted by: resuna

    the macmini...

    258075

    ...is a loss leader to help people to switch platforms with their existing PC peripherals. and an appliance for very specific uses for advanced mac user, for home theater, etc.

    and those margins are better than most industry's margins.

    as usual, subpar reporting from subpar sources.

    Comment posted by: rtbarry

    noloss

    258095

    The Mini ain't no loss-leader! Didn't you read the article. Less profit is not the same as a loss, dude!

    Comment posted by: Feathers

    Apple must keep MacMini

    258096

    Apple had better not remove the Mac Mini from its lineup. It is the last desktop option for users to obtain a Mac with a matte screen (albeit now a non-Apple-made matte screen). The website http://macmatte.wordpress.com indicates 40% of Apple users prefer matte, while 20% absolutely refuse to buy an Mac with a glossy screen. If Apple thinks that, because of razor thin margins, it is not profitable to make the Mac Mini, it will lose more customers.

    Comment posted by: MacMatte

    here, take a taste

    258105

    Schwinn had a very successful sales strategy: sell the kid their first bike and they will buy Schwinn the rest of their lives.

    This is what an entry level machine is about. It's a loss leader, it's that free sample at the food court.

    How many first time Mac users are Mini users? How many buy up to the iMac, how many buy iPods or iPhones to go with their Mini's?

    Profit margin is not the end all.

    Comment posted by: alfredo
    More Comments:.. 1..2..Next
    Your Comments
    In order to post comments, you must be a registered member of the MacNN Forums and logged in. Please login with your MacNN Forums username and password.

    MacNN Forums Login:

    MacNN Forums Password:

    Not a member of the MacNN forums? Register now for free.

     
    Contact Us: News Tips | About/Advertising | Feedback

    XML | RSS | Slim | Avantgo | Mobile/PDAs | Headlines | JavaScript Feed
    Desktop Headlines
    | Search | Archives-

    Buy from The Apple Store, iTunes.com, Amazon.com,
    Buy.com, TechDepot, OfficeDepot, Computers4Sure, or donate.

    Copyright ©1995-2005 MacNN (Mac News Network). All rights reserved. Privacy Policy