iSuppli have reported on their teardown of the Nexus 7 - $152 BOM, if you hadn't seen it already.
Interesting to see how the Kindle Fire BOM has dropped from $191 to $139.80, in the 10 months since it launched. I'm not from a hardware background, but do manufacturers generally launch with the intention of making low margin on early adopters and compensating for that with mass market take-up once prices are lower? If so, given the buzz around decent low-cost tablets, one could consider this low initial margin to be advertising.
How long does a device like this continue to sell for - a year or more? If the Nexus 7 takes the same path, then even sales of the low-end version should be generating a reasonable profit in 6 months time, or leave room to drop the price further if Apple come in low with a rumoured/FUDding (delete as appropriate) smaller iPad.
I also wonder what the "additional costs" iSuppli talk about would include - shipping, packaging (or would the latter be "box contents")?
No idea as I am also software based; but sharing some experiences, that admittedly were on a far longer time scale from when I used to repair consoles whilst at uni (swapping out burnt out cd drives and blown psus) It very quickly became apparent how Sony were driving cost out of the Playstation as they managed to combine things onto a single chip and shrink everything, The last ones in the big grey box were near enough the same motherboard as the smaller white psone
http://en.wikipedia.org/wiki/PlayStation_(console)#Consumer_models
Similarly the very first Dreamcasts were watercooled!
I would have thought that these modern tablets though are on such short timescales tooling the factory would be problematic? perhaps if your are building a brand like Nexus or Galaxy though its worthwhile and effective use of the advertising budget?
Posted by: Kgutteridge | July 12, 2012 at 09:53 PM
I remember hearing a similar thing from a product manager at Nokia a while back - that there's pressure on them to reduce component prices post-launch, so early hardware (for the same model) tends to be of higher quality.
Posted by: Tom Hume | July 13, 2012 at 10:06 AM
Well the price skimming is because of the amount of tablets coming to market. I like the fire but if you have an ipad you don't really care. Even if it has a couple extra cooler features. I do like amazon a lot though! great company.
Posted by: Haylee Campbell | July 18, 2012 at 02:27 AM