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.
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.
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.
...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.
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.
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