backtop

Print E-mail del.icio.us 31 comment(s) - last by spluurfg.. on Jul 12 at 7:28 AM
iPhone and iPod could soon be sharing ideas to spawn new products

In a recent patent application dated July 5, Apple describes a multifunctional handheld device that accepts input via a single input arrangement. Some industry onlookers are pointing to this as a potential sign of a follow-up product to the iPhone.

Those familiar with Apple’s miniaturization and product expansion strategy will not be shocked to learn that analysts are predicting that the iPhone will eventually be joined by a cheaper model based on the design of the iPod Nano.

"We believe that iPod Nano will be converted into a phone because it's probably the only way for Apple to launch a lower end phone without severely cannibalizing iPod Nano," said Taiwan-based JP Morgan analyst Kevin Chang, in a Reuters report, noting that the new phone could have "rather limited functionality."

Another possibility is that instead of iPod Nano designs heading to the iPhone, it will be iPhone technology making its way to the iPod line. Adding touchscreen functionality to the iPod may give the Apple music player a new edge without fearing lost sales to the iPhone.

Analyst Gene Munster of Piper Jaffray says, "We believe the iPhone reveals much of what the iPod will soon be... iPods with some of the touchscreen features of the iPhone should lessen the impact of cannibalization."

The Apple iPhone launched on July 29 many eager fans, quickly selling 525,000 units in just its first three days. Tear-down reports put the costs to manufacture the iPhone at around $265, giving Apple a comfortable profit on each unit sold.

Update 07/11/2007: JP Morgan has issued a note retracting analyst Kevin Chang's assumption that the iPhone Nano would be a near term product from Apple. Instead, the investment firm believes that a 3G-enabled iPhone will be the next product in the family.

Comments     Threshold


This article is over a month old, voting and posting comments is disabled
iPhone cost not relevant
By IcY18 on 7/10/07, Rating: 0
RE: iPhone cost not relevant
By Suomynona on 7/10/2007 9:25:15 AM , Rating: 1
While I'm not an expert, I think that's a pretty big margin in the cell phone industry. Cell phones are such commodities anymore that selling a phone for more than twice the teardown cost is significant. It might not be especially relevant to the article, but with the number of iPhones sold, I'm sure that Apple is making a pretty hefty profit after licensing costs and whatnot.


RE: iPhone cost not relevant
By spluurfg on 7/10/2007 9:49:12 AM , Rating: 1
Correct. According to the FT, margins are generally in the neighborhood of around 8-10% for Samsung and Motorola, 11-12% for Sony Ericsson, and a handsome 15% for Nokia. Granted, however, their market share is much larger and the majority of their sales are not high end products like the iPhone.

As for relevance, I'm sure that there are some financial analysts who read Dailytech for research into the technology industries, so I think it's very relevant.


RE: iPhone cost not relevant
By IcY18 on 7/10/2007 10:02:21 AM , Rating: 3
Like i said previously, i understand that the iPhone costs around $260 or whatever for all the hardware but they did not take into the numerous licensing fees, R&D, and labor to assemble the phone. Too bad Anandtech didn't do a tear down of the BlackJack and Blackberry they had when the compare it to the iPhone, to give a better idea of how the $260 translates into the actual total cost of the phone.

My second point was that it just seemed like it didn't go with the rest of the story. If these financial analysts wanted to know this information then they would have read the full complete article on the cost of the iPhone here.
http://www.dailytech.com/article.aspx?newsid=7939

It's like saying,
quote:
"nVidia/ATi plans to reveal their 8800GS/2900Pro filling the performance gap in the market right now between the high and mid end cards.

It costs nV/ATi $300 to make their 8800GTX/2900XT, giving them a good profit margin.


RE: iPhone cost not relevant
By Kougar on 7/10/2007 3:35:18 PM , Rating: 4
To quote that DT article ya linked:

quote:
In its January cost estimates, iSuppli added non-hardware costs of almost $16 to include EDGE royalties, operating system costs and other software for a grand cost total of $280.83.


That seems like most of the licensing fees right there, which leaves cheap labor overseas and some R&D. R&D can't really be included because it'll depend on how many iPhones are sold from launch to EOL before you can amortize that expense. R&D does not have anything to directly do with the cost of manufacturer, only the operating expenses of Apple.

Frankly I think cheap labor might be lucky to even make it a nice round $300 for the total manufacturing costs per iPhone...


RE: iPhone cost not relevant
By xsilver on 7/11/2007 4:35:23 AM , Rating: 2
what about nokia/samsung/ etc?
do they not pay licensing fees? R&D fees?

with all that they still only operate on a 10-15% margin

granted the iphone is not operating on a 100% profit margin as suggested, (shipping & retail profit is yet to be added)

but it would be reasonable to suggest that a profit margin of 30% isnt unbelievable. (which makes it twice as profitable as any other mobile maker)


RE: iPhone cost not relevant
By deeznuts on 7/11/2007 1:02:58 PM , Rating: 2
quote:
with all that they still only operate on a 10-15% margin
Yeah but you are taking their company as a whole. So that means their high end phones as well as their cheapie low-end low-margin phones. Apple, a company I loathe to defend because of their fanboys, are offering a high end phone only (two versions of it).

Take my phone, Nokia 8800/8801. $1,000 when it first came out, without a contract. Still about $500 now. I didn't pay a dime for it but that's how much it costs. I'm about to replace it with the Nokia 8600 Luna. $800. These are Nokia's higher end phones.


RE: iPhone cost not relevant
By spluurfg on 7/12/2007 7:28:37 AM , Rating: 2
The short paragraph which contained it was just filling in some background information. If I were giving someone some background information about the iPhone, I probably would mention its recent sales and estimated profit margin, considering both are fairly remarkable and higher than the rest of the industry, whether for the high end market or not. So while you may have already read that article, it may be a useful pointer for someone who just joined the story and wants to read more...


RE: iPhone cost not relevant
By GoatMonkey on 7/10/2007 9:54:49 AM , Rating: 2
Nobody ever said that Daily Tech is completely unbiased. It's pretty common for the editors to chime in in the comments section too. Makes it a little more interesting in my opinion.

Maybe it's not exactly $335 profit per phone, but it's most likely a pretty healthy profit margin. Steve's gotta make some money too, how else is he going to get up to the level of Bill?


RE: iPhone cost not relevant
By thatguy39 on 7/10/2007 5:21:08 PM , Rating: 2
They're getting paid by AT&T for bringing new subscribers, not the other way around, which adds to their profit margins.

Everyone knows Apple pays for R&D but in comparison to how much profit their making on each phone, its not that much.

Also, Apple already has just about all the programmers and designers they need, those guys are being paid no matter what, so its not like theres a jump in development spending for the iPhone.

I'll finish with a basic business lesson:

If a company is making almost 50% profit margins, they're doing great... the only other business I can see where people make 40%-50% profit is drugs... and last time I checked drug lords are living good.


RE: iPhone cost not relevant
By animedude on 7/11/2007 6:09:59 AM , Rating: 2
Labour should not be considered as a cost. Apple probably contract some Chinese manufacturer to assemble the iPhone and pay minimum cost for it.


RE: iPhone cost not relevant
By FITCamaro on 7/11/2007 8:27:41 AM , Rating: 2
Well isn't Apple's crap pretty much a drug? I mean Apple people obsess about it like drugs. They run out and buy it regardless of its features or how good it is vs. competitor's products.

Anyway, I seriously doubt all that much R&D went into the iPhone. They already had the video iPod. Add touch screen and cell phone hardware, and you've got the iPhone. Yes I know it's more complicated than that, but its not like they spent years and hundreds of millions of dollars of R&D on this thing. They spent a year or so on it. And a lot of the technology they already had. So it was just a matter of fitting it together and tuning it.

But this is why I don't buy Apple products. They seem to think that because they're Apple, that justifies making me pay 30-50% more for their device than it costs to make when there's more, better choices on the market. Sure if you don't mind being locked into the Apple world, its great. But if you care about having a choice, its not.

People whine and bitch about how Windows and anything Microsoft is a closed system but then cheer and congratulate Apple for the same thing.


Are you freakin' kidding me?
By redbone75 on 7/10/2007 7:17:23 PM , Rating: 2
If Apple is actually granted this patent I will shoot myself, or some inanimate object (the latter being most likely).




RE: Are you freakin' kidding me?
By Aprime on 7/10/2007 7:19:26 PM , Rating: 2
I don't know what would be the point of having an iPhone "Nano".

And the whole LOLZ IPOD WITH TOUCHSCREEN deal = so yesteryear it's not even funny.


By Jack Ripoff on 7/11/2007 11:21:55 PM , Rating: 2
RE: Are you freakin' kidding me?
By redbone75 on 7/10/2007 7:20:56 PM , Rating: 2
I mean, correct me if I'm wrong, but this alread describes the iPhone, and it's not like touchscreen devices haven't been around already that do exactly the things this patent describes. What is Apple's claim to fame? That they released a damned phone? Didn't HTC actually beat them to the punch with the Touch?


RE: Are you freakin' kidding me?
By OblivionMage on 7/11/2007 7:03:06 AM , Rating: 2
Thier claim to fame is that they can trick people into buying thier overpriced products, thier trick? Put the Apple logo on it -.-


RE: Are you freakin' kidding me?
By FITCamaro on 7/11/2007 8:34:06 AM , Rating: 2
Well said.

Put the Apple logo on a Pinto, paint it white, give it an iPod dock to the shitty stereo, and call it the iCar, and people will buy them like hotcakes.

Apple. Your life, belongs to us.


RE: Are you freakin' kidding me?
By FITCamaro on 7/11/2007 8:29:25 AM , Rating: 2
How about you shoot Michael Moore? He doesn't count as a person but is more than an inanimate object.


What would be the point of an iphone nano?
By darkpaw on 7/10/2007 9:31:02 AM , Rating: 2
If you stripped out all the features that make the iphone different, you're left with a fairly average phone that plays MP3s. The likliest place they would cut features is the touch-screen, lose that and its just an Apple branded phone exactly the same as every other one already on the market.




By spluurfg on 7/10/2007 9:49:53 AM , Rating: 2
True, but at this point do you think it wouldn't sell? Apple has become a status symbol.


RE: What would be the point of an iphone nano?
By thatguy39 on 7/10/2007 5:25:20 PM , Rating: 2
quote:
If you stripped out all the features that make the iphone different, you're left with a fairly average phone that plays MP3s.


Dumb statement of the day, easily.

And if you took the wheels off a Ferrari it would lose a race to a Hyundai...

You make no sense.


By xsilver on 7/11/2007 4:32:49 AM , Rating: 2
you need to read a little harder
to use your analogy

what the OP was trying to say was
whats the point of ferrari building a hatchback?
if they did it wouldnt be too much different than any other hatchback.


By OblivionMage on 7/11/2007 7:00:58 AM , Rating: 2
It would still lose a race perhaps, but it would still be 'better' in most senses. Wheels on a car are kind of like electricity to such phones. If you take them away, of course they will stop functioning.
If you took away everything on the ferrari that makes it different, are you left with a 'crappy' phone that plays music files?


Brilliant!
By Gul Westfale on 7/10/2007 12:19:11 PM , Rating: 3
so an analyst figured out that apple could use technology from one of its products in one of of its other products? BRILLIANT! give the man a raise, right now! /sarcasm




RE: Brilliant!
By ElFenix on 7/10/2007 5:26:02 PM , Rating: 2
more importantly, how do i get this guy's job? i would love to be paid to give a patently obvious prognostication every day.


NanoPhone vs. iPod Touchscreen.
By IcY18 on 7/10/2007 9:23:20 AM , Rating: 2
The next step for the iPod is fairly obvious, even more so with the release of the iPhone. With a bigger screen and sleeker design( because of the touch screen interface, its the kind of evolution you would expect on the iPod.

While both products would be cool the NanoPhone really peaks my interest, while i don't see myself buying a first gen product of either the iPhone or the potential NanoPhone due to the little things you know will get worked in the next gen, the NanoPhone would be something that could offer the sleek touchscreen of the iphone, but drop the screen size, some other features that we don't necessarily need, and the price by $300 and focus the NanoPhone on the mainstream market with a more cell phone like focus rather than multimedia device.




By piroroadkill on 7/11/2007 8:12:44 AM , Rating: 2
"piques my interest" not peaks


Launch date incorrect?
By d1nn0 on 7/10/2007 2:22:19 PM , Rating: 2
The last paragraph of the article starts with "The Apple iPhone launched on July 29 ..."
I think it should be June instead of July ...




Huh?
By ahsalloum on 7/11/2007 8:03:58 AM , Rating: 2
This sentence sounds weird:
quote:
The Apple iPhone launched on July 29 many eager fans ...

I really want to buy an iPod, but I've been waiting for more than 6 months for a new generation iPod. Hopefully, it will come to life soon.




real buttons
By Zensen on 7/10/2007 10:56:43 AM , Rating: 1
Personally I prefer buttons on my phone but a touchscreen ipod would be nice though itunes has always been something i've disliked but for many people, its no big deal.

I wonder if people have got a lot of battery life out of the iphone. hope its good.




"This is from the DailyTech.com. It's a science website." -- Rush Limbaugh

DailyTech Poll
Which web browser do you use on your primary personal machine? 






44 Comments









botimage
Copyright 2009 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki