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Path: utzoo!utcs!mnetor!george
From: george@mnetor.UUCP (George Hart)
Newsgroups: net.micro
Subject: Re: Base price for popular micros
Message-ID: <964@mnetor.UUCP>
Date: Tue, 11-Jun-85 10:44:56 EDT
Article-I.D.: mnetor.964
Posted: Tue Jun 11 10:44:56 1985
Date-Received: Tue, 11-Jun-85 12:15:53 EDT
References: <5864@ucla-cs.ARPA>
Organization: Computer X (CANADA) Ltd., Toronto, Ontario, Canada
Lines: 47

> I just read that Apple's cost of building a Mac is $200.
> I wonder what the cost is to build an IBM/PC! I find it
> hard to believe they can do it with so little money.
> 
They are probably buying components in sizeable quantities and they seem
to have a reasonable manufacturing process which gives them a good yield.
These would contribute to a lower unit cost.

> Could somebody provide an explanation? If these are
> the real numbers, why don't we get cheaper stuff?
> Can we extrapolate and say that a Sony Trinitron
> costs $50?
> 
> 	Adolfo
> 	      ///
The $200 dollar figure must be cost of parts (maybe including direct labour). 
It couldn't be taking into account any loaded costs such as advertising,
office overhead, R&D, etc.

If you don't think that advertising would be a big bill, just think about
that issue of Newsweek(I think), the one around U.S. election time where
Apple bought *ALL* the advertising.  Rumour has it the Jack Tramiel at Atari
makes an ST for less than Apple spends on advertising a Mac.

Then after costs, there is also the small matter of profit for Apple and its
dealers.  How big the margin is for Apple will depend on their volume
and how elastic they feel the market is.  From what I have heard, it is not
unusual for an electronics manufacturer to have a 300-400% markup over some
measure of unit cost (I'm not sure what cost bases are used).

I imagine that IBM is making a smaller margin on the PC but they are(have)
sold alot more units (an order of magnitude more?, I'm not sure what Mac sales
figures are at these days).

As for the Trinitron, its cost is probably pretty low too.  Here, I think
it is just a case of prestige marketing.  For a long time, it was the best
set around and the people paid the difference.  But I'm not so sure that
is true anymore and it will be interesting to see what Sony does.


-- 


Regards,

George Hart, Computer X Canada Ltd.
{cbosgd, decvax, harpo, ihnp4}!utcs!mnetor!george