iPad mini cost in the production of more expensive full-sized iPad

Popularity iPad mini affected the financial performance of Apple - this was not denied even by the company's management. IPad sales growth rate in real terms start crawling pace increase in revenue from the sale, and significantly. According to Tim Cook, to blame the high popularity of mini-tablets, the sales which the company has a lower rate of return.

Average selling price of the tablet Apple eventually for the year decreased by $ 101, and compact tablet for all applicants is not enough, which, by the way, the company earns less than the 10-inch iPad, so considering the promises Cupertino end deficit "Minicom" to end of the year we can talk about further reducing the rate of profit in this sector of activity.

The message in the same vein, the published version DigiTimes, which has revealed interesting information about the production cost of iPad. It is reported that currently costs the Apple iPad mini in the production of more expensive full-size plates, and sold it at a lower price. This suggests that the income in the foreseeable future, Apple will continue to decline if the sales volume will surpass iPad mini iPad.

DigiTimes suggests that in the current quarter iPad shipments could fall by 40% on a seasonal slowdown in demand. We are talking about the tablet with a screen size 9.7 inches. Sales of iPad mini only go up. Issue 10-inch panels from Sharp for the iPad will be almost completely stopped, although this is not to judge the extent of the impact of these changes on the total production. LG Display and Samsung make up for lack of displays, and Sharp, meanwhile take up training to produce displays for the iPad and iPad mini next generation.

It is noteworthy that the "cannibalization" of gadgets in general, Tim Cook called a favorable factor. The philosophy of the corporation, according to the director general, is the lack of fear of this phenomenon. Let the best Apple products compete with each other than they will be replaced by other manufacturers. iPhone takes customers from iPod. Tablet iPad rob customers at Mac. In the next three years, according to Cook, the tablet market will overtake PC market in terms of sales.

Moreover, Cook said that the PC and tablets begin to find much common ground. iPad mini for many people is the first product Apple, and it will attract an army of fans of the company's new adepts. Cannibalization, from this point of view, Apple opens to large market opportunities.

Budget iPhone: a strategy to enter new markets

What should be the price of the budget iPhone, about which so much has been said in the press that Apple did not lose profits? This question was asked a journalist Jean-Louis Gasse, who worked for "apple" Company from 1981 to 1990. He published a number of possible scenarios that can predict the next steps of Tim Cook in this niche.

If Apple does introduce a cheap iPhone, this move in the near future will be positioned as a new era for the Cupertino-based corporation, and as a signal for another round of war in the mobile market. According to Hasse, if Apple will decide to enter the market, its leadership is to solve two problems: what benefits will provide a cheap iPhone and what it promises for the company?

Suppose the production budget machine will cost $ 100 (about half of the production cost of the iPhone 5), and given that the margin of the Apple iPhone 5 is 60%, the cost of inexpensive smartphone Apple should be in the range of $ 299 - you see, a lot of conventional "cheap iPhone ".

If Apple will seek to segment to $ 199, its profits immediately reduced by 50% for each unit sold. Moreover, Bloomberg said that the price tag of the new phone will be around $ 150 - $ 199. At a cost of $ 150 U.S. manufacturer margin drops to 30% - but the phone will be half the price of iPhone 5. But what about the incredible number of one hundred dollars? Provided that Apple will have a minimum margin in the same 30% - Production cost is $ 75, which is about a third of the price of the iPhone 5.

Will Apple do that? If yes, then it is strongly modify many business strategies. Especially given the fact that the iPhone - the strongest brand in the smartphone market.

According to Hasse, cheaper iPhone may be released not to attract millions of people and for the running of the new strategy to a fight competitors in other niches. Indeed, in 2007 the iPhone was born on the Rights of the elite smartphone, but since then a lot has happened, you can not always milk the same cow - one day it will simply stop giving milk.

The spread of smartphones in the U.S. and other key markets, such as Europe, has already exceeded the threshold of 50%, so that the victory in the remaining 50%, and success in emerging markets will be entirely due to pricing. The Brazilian and Indian markets demand for expensive phones is extremely low - the most popular proposals do not exceed $ 200. Therefore, Android is running the show, because the devices on this platform sometimes reach a democratic price tag of $ 99. Apple with the high prices are not particularly popular in emerging markets and low-cost iPhone could change that.

In other words, it is pure mathematics: the economic success of the iPhone is closely linked to the price, but it can not be very low - Apple margin is 60%, and the production cost a decent amount, the company is unlikely to compromise and will replace the matrix of prices, given the cheap 8GB model iPhone 4. On the other hand, no one says that the Apple iPhone is obliged to release the $ 99 - it would be too much. However, it is acceptable any alternative, like iPad mini - it costs $ 329, that in the context of the Amazon tablet for $ 199 - $ 249 seems to be less advantageous option. However compact iPad popular - it's not too expensive, but at the same time, high-quality product.

Jean-Louis Gasse believes that if Apple will be able to find a compromise between price and quality, it will start to compete in new niches for themselves. For example, in developing countries is much more difficult to offer credit, as few potential customers have access to credit, and generally are not used to pay for some parts. In these states, much better to sell the goods at once - but at a low price.