01.14
All these reports of the Nexus One only costing a pittance for Google to manufacture, yet for which they charge a premium to purchase are really great at ignoring large areas of cost that go into the creation of such a device. They did the same with the Apple iPhone, as well.
I won’t even bother expanding on the point that a a company can charge what ever the fuck it wants for a product, regardless of what it costs to produce.
This article, in today’s Sydney Morning Herald, is a prime example of the complete BS that passes for journalism and news analysis these days. The piece if rife with omissions and lies.
I’ll start with possibly the most hilarious bit; a quote from an analyst (BTW, I’ve always ‘analyst’ was a synonymous with ‘unemployed business major’).
“You can’t base margins off of costs alone,” said Canaccord Adams analyst Peter Misek, noting that a variety of expenses are not reflected in so-called teardown reports, which dissect an electronics device and take inventory of the various parts.
Erm…Correct me if I’m wrong, but aren’t expenses – things you spend money on – incurred during the development of a product, also able to be called..I don’t know…costs? So, I would assume that you think margins are calculated by…magic? A dartboard? Last weeks Lotto numbers?
Secondly, all these articles ever refer to is the cost of the components in the device itself. They seem to have forgotten about R&D, testing, manufacturing, marketing, regulatory approval. You know, all those other things that help put things on the shelves for you to buy.
Thirdly, who cares? I don’t care that Apple only spent two pieces of gum and an old Biro to create my iPhone, I’m happy with the prices I’m paying for it, I believe that I’m getting my money’s worth, so I bought it. If you don’t want to spend $600-$800 on a phone THEN DON’T. You’re not under any obligation to pay that if you don’t want to. If the company has tried to be too greedy with their pricing, then people (as a whole) won’t purchase it and the price will come down. It’s called a free-market.