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why does the 3g ipad cost so much more then wifi

Greed

Apple only makes $200 on the basic iPad, according to a recent article (Computerworld, I think). With the 3G version, they add another few bucks to that. Wealthier people will buy the more expensive options, so at least the basic versions' owners are relatively undertaxed.

So it's just good old-fashioned greed.
 
kernkraft said:
Apple only makes $200 on the basic iPad, according to a recent article (Computerworld, I think). With the 3G version, they add another few bucks to that. Wealthier people will buy the more expensive options, so at least the basic versions' owners are relatively undertaxed.

So it's just good old-fashioned greed.
Click to expand...

Also known as "business"
 
kernkraft said:
Apple only makes $200 on the basic iPad, according to a recent article (Computerworld, I think). With the 3G version, they add another few bucks to that. Wealthier people will buy the more expensive options, so at least the basic versions' owners are relatively undertaxed.

So it's just good old-fashioned greed.
Click to expand...

They don't make $200 on the basic iPad. They likely lose money on the basic iPad or at best break even.

I suggest some sort of intro to business basics class at a local community college to get a fundamental understanding of business. I don't mean this in a sarcastic way. It just would not hurt to enlighten yourself on this issue.

At the very least go back over some of the other threads here where this has been discussed in detail and explained why that information you are reporting is absolutely incorrect from the standpoint of you using it to determine how much profit apple is making on a basic iPad.
 
marksman said:
They don't make $200 on the basic iPad. They likely lose money on the basic iPad or at best break even.

I suggest some sort of intro to business basics class at a local community college to get a fundamental understanding of business. I don't mean this in a sarcastic way. It just would not hurt to enlighten yourself on this issue.
Click to expand...

I have a Masters degree in management (before, I studied economics in Europe) and I went to a good law school in the UK.

Apple is not losing money on the iPad. Even if they created a whole new OS and developed a thousand new ways that you can use your glorified and overgrown iPod Touch, it would still make money on the basic iPad.

But I send my best wishes to the community college, they might find this link helpful:http://www.businessweek.com/news/20...t-as-little-as-219-isuppli-says-update1-.html
 
vertigo235 said:
Also known as "business"
Click to expand...

I see where you are coming from... But if it was 'good business', then there would have been no negative reviews at this magnitude.

If there will be any price adjustments or special deals (or change in the proposed specification), then I take it as greed was also in the decision of charging from $500 for a device that will be in direct competition with devices that have either better screen, more functionality or lower price.
 
kernkraft said:
I see where you are coming from... But if it was 'good business', then there would have been no negative reviews at this magnitude.

If there will be any price adjustments or special deals (or change in the proposed specification), then I take it as greed was also in the decision of charging from $500 for a device that will be in direct competition with devices that have either better screen, more functionality or lower price.
Click to expand...

Negative "reviews" ? Seriously?

You can't even Pre-order this thing yet, we have yet to see any "review" of this product.
 
Bytor65 said:
Yeah, the rest is called profit margin. Simple solution. Don't buy 3G.

How many people are going to walk around with an iPad anyway. It doesn't fit in your pocket.

I would use it at home 99% of the time and if I brought it somewhere, I would look for a Hotspot if I wanted to surf. You can still read books/comic, listen to music, play games, watch video without a connection.

When you think about it, do you really need 3G?
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The simple answer - yes. There are plenty of times when people are away from WiFi spots and need internet access. Sounds like you might be lucky enough to get by with the cheaper model.
 
Price has nothing to do with costs.

Only with what enough customers are willing to pay today, whether the competition can undercut you for those customers soon enough, assuming you should be in business in the first place.

Even if the tooth fairy could manufacture 3G iPads for Apple (but not for you or the competition) for 3 cents apiece.

So the real reason for the 3G iPad price is that the typical customers for the 3G product usually have more money in their wallets, Apple want to relieve them of as much of this extra money as possible, and the competition is too far behind to get to those customer's wallets first.
 
kernkraft said:
But if it was 'good business', then there would have been no negative reviews at this magnitude.
Click to expand...

The most innovative products get the most negative reviews. It's not a faster horse, which is what most people wanted before Ford (et.al.) started manufacturing affordable motor cars.

Of course Ford also came out with the Edsel.
 
Just a theory here -- we'll find out once Apple starts reporting the 3G sales numbers...

I wondering if maybe in exchange for the more reasonable no-contract rates Apple is paying ATT for each 3G iPad Sale, say $75. That would explain why the markup on the 3G radio is so large (not the iPad, just the 3G radio component). Essentially it's a reverse subsidy, with, effectively, the consumer paying a higher buy-in for access to no-contract service at a reduced price over the normal 3G data for non-phones contract rate.
 
I don't get what everyone is complaining about. I personally think that the iPad is extremely well priced. The most expensive model is under $850, and I thought the cheapest model would have been close to $1000.

You pay more for options no matter what you buy. You don't want to pay $130 for 3G then don't get it. Same as if you don't want the premium sound system in your car or power windows, you don't get them.

I just don't understand why when it comes to computer stuff everyone thinks it has to be free. You want features you pay for them, simple. Having had the iPhone almost 2 years now, I see and read comments on people complaining about the cost of apps. I'm sorry but when an app does everything your looking for, I don't mind paying for the app. The most expensive app I paid for on the iPhone was $12.99, and it's the most used app on my iPhone. It gets bad reviews on the App Store just because of it's price, yet there is a free (lite) version available for you to try before you buy. When it becomes the most used app on my iPhone, I don't think $12.99 is a lot to pay.

Personally, I plan on getting the 64GB with 3G. I never use the WiFi on my iPhone nor do I use wi-fi on my laptop. I have a 3G card for that.
 
Apple, unlike every other computer hardware maker, prices their products as a luxury good. They get away with it. I'm sure Dell and Acer would like to, too.

Look at the 13" mbp. The base model is (arguably) no better than the $999 MacBook, but costs $200 more. The high end 13"mbp cost $300 more than that, and all you get is more memory, bigger hdd, and (for most people) an insignificantly faster processor.

For those of us in the know, the $1500 13" mbp is a wretched value. Buy for a wealthy parent buying their son a laptop (for middle school) the get the higher end model.

It's the same thing with the storage on the iPhone, iPod touch and now the ipad. The marginal cost of 32 gb v. 16 gb is not $100. So apple makes more money.

Call it robbery if you like, but it works for Apple, and they won't change as long as it does.
 
kernkraft said:
Apple only makes $200 on the basic iPad, according to a recent article (Computerworld, I think). With the 3G version, they add another few bucks to that. Wealthier people will buy the more expensive options, so at least the basic versions' owners are relatively undertaxed.

So it's just good old-fashioned greed.
Click to expand...

1) It's not really possible to know what Apple is making or losing on the iPad. We have a guesstimate on the manufacturing costs, but nothing else.

2) What fact do you have that "wealthier" people will buy the more expensive version? That assumes "wealthier" people spend their money without thought to their own needs. While that is the "Beverly Hills," "Bond Street," etc caricature it is just a stereotype. Most wealthy people like their money as much as non-wealthy people and don't spend it just to spend it (not really sure what you standard is on who qualifies as wealthy).

3) Only governments can tax. A tax is something you must pay -- or risk losing property or freedom (jail). Businesses set prices for products and services. You are free to avoid the price by avoiding their product or service.

4) Greed can only be present when an item is artificially set high on an item that is more necessity than luxury, and when its less fungible. Pricing water at $1000 a gallon during a drought is greed. Putting a steep premium on a media appliance is pricing strategy. In the former buyers have no where to go. In the latter they can find a different media appliance from a different company to buy, or just not buy one at all.
 
lord patton said:
Apple, unlike every other computer hardware maker, prices their products as a luxury good. They get away with it. I'm sure Dell and Acer would like to, too.
Click to expand...

Apparently in terms of building 3G into devices, Dell and HP are able to do what apple does.

It's not Apple acting in an exclusive manner gouging people. Across myriad types of products (iPad, full blown notebook, and netbook) involving several companies, building 3G into a non-phone device has been an additional cost, well over $100, for consumers.

It's not some scheme by greedy Apple execs hanging out in an undisclosed location thinking on how to screw consumers. It's not some way to subsidize the $499 model (which is not a loss-leader). It's also probably not some way to backdoor subsidize the telcoms. For whatever reason, it's the price that the market dictates that 3G be built-in.

Apple could have said, all iPads will have 3G built-in whether you want it or not and start the price at $649.99. Instead, they made it an option - something that is a good thing.
 
I just want to say, off-topic for a moment, I am far from wealthy, and I have the higher-end MBP 13". Just felt like it was the best decision for me, without having to bother changing RAM out, etc. And I got a faster proc. Bonus. :)

On-topic, I just want to buy this 3G iPad already. 32GB here I come. And sure, they are most likely making money of the device, but they will make far more money off the app sales :).
 
firewood said:
Who do you think it is that keeps all those high fashion shops on 5th Avenue, etc., Lexus and Accura dealership, etc., in business?
Click to expand...

1) You are feeding into the caricature. You don't have to be wealthy to shop on 5th Ave or buy a Lexus or Acura, you just have to have good credit. In marketing terms its called "affordable luxury," and it belongs in the domain of the middle class. If you watch the credit meltdown over the past year and a half you'd see that a lot of people spent money they didn't have. These were not "wealthy" people they just pretended to be.

2) There are about 1m millionaires in the U.S. -- that is people who have at least 1m in cash and/or investable liquid or semi-liquid assets. Real property doesn't count because it can't be converted to cash quickly. Do you really think the majority goes on 5th Ave. shopping sprees and dine on steak and lobster nightly? No. Most are actually fairly tight with there money -- they worked hard for it and want to keep it. Generally, they buy only what they need. I'm talking about wealthy - not super wealthy, which is the top 1% of the top 1%. That demo has a life of it's own but is too small to factor into a consumer products bottom line.

I suggest you read a little rather than getting your info from TV and Movieland. The Millionaire Next Door is a great start: http://www.amazon.com/Millionaire-Next-Door-Thomas-Stanley/dp/0671015206
 
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kernkraft said:
I have a Masters degree in management (before, I studied economics in Europe) and I went to a good law school in the UK.

Apple is not losing money on the iPad. Even if they created a whole new OS and developed a thousand new ways that you can use your glorified and overgrown iPod Touch, it would still make money on the basic iPad.

But I send my best wishes to the community college, they might find this link helpful:http://www.businessweek.com/news/20...t-as-little-as-219-isuppli-says-update1-.html
Click to expand...

What schools are those? I'd like to make sure they aren't on my list of potential grad schools.
 
jb1280 said:
Apparently in terms of building 3G into devices, Dell and HP are able to do what apple does.

It's not Apple acting in an exclusive manner gouging people. Across myriad types of products (iPad, full blown notebook, and netbook) involving several companies, building 3G into a non-phone device has been an additional cost, well over $100, for consumers.

It's not some scheme by greedy Apple execs hanging out in an undisclosed location thinking on how to screw consumers. It's not some way to subsidize the $499 model (which is not a loss-leader). It's also probably not some way to backdoor subsidize the telcoms. For whatever reason, it's the price that the market dictates that 3G be built-in.

Apple could have said, all iPads will have 3G built-in whether you want it or not and start the price at $649.99. Instead, they made it an option - something that is a good thing.
Click to expand...

Amen. Glad to hear others saying it too, because people seem to be in a reality warp in this sub forum where they see bad greedy apple charging as much as anyone else is charging for 3g...
 
Since people willing to pay extra for the 3G version are also willing to pay for data plan service, it makes sense that Apple chooses to rip these customers off the most. These customers are more likely to spend the extra money than someone who only wants the WiFi version.
 
From where I stand, that $130 charge is all profit for Apple. The 3G chip will probably be on every iPad motherboard. Much the same way the Touch has FM and Bluetooth but Apple only activates which one they want to and when they want to. They'll need a way to de-activate your 3G if/when you stop paying the monthly fee, so it's just as easy to have that 3G chip in place in every iPad and only activate (enable?) it for those paying the extra $130.

The Kindle has 3G built in, no monthly fee, and all for 1/2 the price of a non-3G iPad. Apple could do that if they wanted. They prefer to gouge consumers though. They can, so they do.
 
4DThinker said:
From where I stand, that $130 charge is all profit for Apple. The 3G chip will probably be on every iPad motherboard. Much the same way the Touch has FM and Bluetooth but Apple only activates which one they want to and when they want to. They'll need a way to de-activate your 3G if/when you stop paying the monthly fee, so it's just as easy to have that 3G chip in place in every iPad and only activate (enable?) it for those paying the extra $130.

The Kindle has 3G built in, no monthly fee, and all for 1/2 the price of a non-3G iPad. Apple could do that if they wanted. They prefer to gouge consumers though. They can, so they do.
Click to expand...

I think it's hilarious that you are comparing the Kindle to the iPad.
 
4DThinker said:
From where I stand, that $130 charge is all profit for Apple. The 3G chip will probably be on every iPad motherboard. Much the same way the Touch has FM and Bluetooth but Apple only activates which one they want to and when they want to. They'll need a way to de-activate your 3G if/when you stop paying the monthly fee, so it's just as easy to have that 3G chip in place in every iPad and only activate (enable?) it for those paying the extra $130.

The Kindle has 3G built in, no monthly fee, and all for 1/2 the price of a non-3G iPad. Apple could do that if they wanted. They prefer to gouge consumers though. They can, so they do.
Click to expand...

Did you notice the black strip on the 3g back? That is where the radio is. Es obviously not on the WiFi version.
 
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