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Apple refreshes iMacs; IHS estimates 5S costs $199 to make

  • A year after Apple (AAPL +0.2%) launched new iMacs featuring an overhauled, ultra-thin design to much fanfare, the company has more quietly refreshed the internals of its all-in-one desktops.
  • Apple's new 21.5" and 27" iMacs contain quad-core Intel Haswell CPUs (Core i5 and i7, 2.7GHz.-3.4GHz.), and 3 of the 4 feature Nvidia (NVDA -0.2%) GeForce 700 series GPUs (Apple promises a ~40% GPU performance gain). 802.11ac Wi-Fi radios and improved flash memory and Fusion Drive performance are also part of the package.
  • The new iMacs are priced from $1,299-$1,999. Apple's Mac revenue fell 1% Y/Y in the June quarter to $4.9B (better than the PC industry's performance). Units fell 7% to to 3.75M.
  • Meanwhile, after tearing the devices down, IHS estimates a 16GB iPhone 5S (unsubsidized price of $649) has a manufacturing cost of $199, and a 16GB 5C ($549 unsubsidized) a cost of $173.
  • The research firm points out Apple puts more effort into RF chip integration than rivals. "Where other phone companies would be using whatever chips its various vendors sell off-the-shelf, Apple seems to be pushing its RF suppliers to do things they don’t do for anyone else."
  • IHS thinks it only costs Apple $10 more to make a 32GB 5S than a 16GB 5S, and $19 more to make a 64GB 5S. Thus, the $100 and $200 markups for the 32GB and 64GB models are respectively estimated to carry incremental margins of 90% and 90.5%.
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Comments (14)
  • JUDOKA
    , contributor
    Comments (406) | Send Message
     
    Convert these numbers to margins.That is what everyone seems to be worried about.
    24 Sep 2013, 10:57 AM Reply Like
  • BTM
    , contributor
    Comments (368) | Send Message
     
    The margins are incredible but also support my belief that the 5c could be sold for much less and address emerging markets.

     

    Oh well, I have expressed my feelings by selling off a good chunk of my position in AAPL. I like their products but am less enthused about the stock.
    24 Sep 2013, 11:14 AM Reply Like
  • tech01x
    , contributor
    Comments (723) | Send Message
     
    The IHS estimates have to be taken with a huge dose of salt. That's is not nearly what it really costs Apple to make each 5c. I do believe that Apple could to a mid-refresh price cut or offer more aggressive promo pricing to carriers in lieu of a MSRP adjustment.
    24 Sep 2013, 01:21 PM Reply Like
  • rrosey2
    , contributor
    Comments (699) | Send Message
     
    Why don't you leave the driving to Apple ?

     

    They have good control and know what they're doing.

     

    Today, I got to my computer too late to buy at $489.

     

    Pity
    24 Sep 2013, 04:36 PM Reply Like
  • milehr
    , contributor
    Comments (497) | Send Message
     
    The real margins are smaller, since one needs to account for software cost and support, which is second to none.
    24 Sep 2013, 05:15 PM Reply Like
  • VictorHAustin
    , contributor
    Comments (827) | Send Message
     
    This year you could make 300 million of a product that costs you 250.

     

    If you price it at 550 you could sell 200 million of them. At 425 you could sell them all. What is your price?

     

    Apple is not a manufacturer. It should not go down the commodity volume sales route that has so poorly served companies now struggling to survive.

     

    Leave the bulk of the market on the table if it doesn't leave a profit over the long haul after considering all factors.

     

    Apple will someday be a textbook company that innovated a better way to run a business, where more is not necessarily more, or better.

     

    Bragging rights can't pay dividends.
    24 Sep 2013, 07:31 PM Reply Like
  • june1234
    , contributor
    Comments (2625) | Send Message
     
    $199? Chinese must have gotten a raise.
    24 Sep 2013, 12:06 PM Reply Like
  • Don Casmillo
    , contributor
    Comments (70) | Send Message
     
    While the Chinese do the assembly, only a relatively small portion of the manufacturing cost is Chinese content. Other articles available on the Web have given detailed analysis by origin.
    24 Sep 2013, 02:46 PM Reply Like
  • bgold1955
    , contributor
    Comments (2066) | Send Message
     
    If long AAPL, I suggest being patient. Easier to be more patient since Monday's numbers.
    24 Sep 2013, 12:26 PM Reply Like
  • Keep It Simple
    , contributor
    Comments (471) | Send Message
     
    Agreed. 9 mil units sold in one weekend and 200 mil iOS7 dowloads is nothing short of amazing.
    24 Sep 2013, 12:53 PM Reply Like
  • city man
    , contributor
    Comments (14) | Send Message
     
    I think IHS should out of there behinds regarding costs of mfg, assembly, storing, design, shipping, returns, repair ( very unlikely) stores, contributions, etc, "ETC". A 5 dollar can grow like a weed over nite.
    24 Sep 2013, 02:25 PM Reply Like
  • city man
    , contributor
    Comments (14) | Send Message
     
    I think IHS should get out of there behinds regarding costs of mfg, assembly, storing, design, shipping, returns, repair ( very unlikely) stores, contributions, etc, "ETC". A 5 dollar can grow like a weed over nite.
    24 Sep 2013, 02:25 PM Reply Like
  • krames
    , contributor
    Comments (176) | Send Message
     
    I bet when CHM gets on board apple will lower the price on 5c but, for now I think apple is selling them above their 37% average margin, So the so called profit margin everybody is worried about I think will be on the very high side on earning report, especially with the 5c & 5s and the 32 and 64 phones that are sold out with the high margin..
    24 Sep 2013, 06:02 PM Reply Like
  • virtalex
    , contributor
    Comments (262) | Send Message
     
    the phones sold to emerging markets are lost resources probably forever.. those phones will never be recycled... they are just gone forever I guess... such a pity.
    25 Sep 2013, 03:53 AM Reply Like
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