Text 9453, 117 rader
Skriven 2006-01-29 14:46:08 av Glenn Meadows (1:379/45)
   Kommentar till text 9432 av John Oellrich (1:379/45)
Ärende: Re: iPod business
=========================
From: "Glenn Meadows" <gmeadow@comcast.net>

I really don't know what it costs for them to run it, but I know it's a large
staff, large data infrastructure.  I don't know what bandwidth costs are at
that level either.

BUT, I do know for a fact that we get 66/67 percent of the sale of each item
sold.  I see the sales reports every month.

Their percentage they keep is actually LESS than Wal-Mart/Target get on the
physical good sale markup for standard retail.

--

Glenn M.
"John Oellrich" <john@oellrich.us> wrote in message news:43dbfbde@w3.nls.net...
Glenn,

I'm pretty sure I read that Apple has been getting a much larger chunk of the
music sale than that. But now I can't remember where I read it.

As Apples revenues on iPods, of course it is a major contributor. The sold over
11 times more iPods than Macs of all flavors (14 million vs. 1.25 million) in
the last quarter. And for revenue its $2.9B for the iPods, $1.7B for the Macs
(or $207 per iPod and $1,724 per Mac). I would argue that the margins are much
different for an iPod than a Mac. The Mac benefits from using truly commodity
components (other than the CPU, but going Intel will solve that nasty little
problem) where Apple benefits from the volumes of the entire PC industry. The
same is not true for the iPod, a lot of comparatively low volume and expensive
(smaller ain't cheaper) components.

When the iPod Nano was released a study of its Bill of Materials (the cost of
the components) showed that it was in fact being sold at a loss. The cost of
the flash in the device alone was around 40% of its list price. The total BOM
for a device should only be roughly 33% of its list price is the old rule of
thumb. The speculation was Apple priced it as it did for one reason, boost
iTunes downloads.

The revenue from iTunes last quarter was $491M (not a pure number, Apple rolled
up some other revenue sources in the number as well, but iTunes is probably the
lion's share). Let's ignore the fact that this isn't a pure number and go with
your 2/3's back to the studio (oops just did a Google, Apple gets a tad over
34%). 34+% of $491M is $168.4M or $56.1M per month. How much do you really
think it costs Apple to run iTunes per month? Whatever, it is not going to be
anywhere close to $56.1M. Overall in Apple's profits, yep iTunes is small
potatoes, but a potato that is growing very rapidly.

--
john

john@oellrich.us
  "Glenn Meadows" <gmeadow@comcast.net> wrote in message
news:43db9005$1@w3.nls.net...
  John,

  I've got to side with Rich on this.  Apple does NOT make any appreciable
  profit on the store.  2/3 of the revenue from the sale of a track goes to
  the label who owns the copyright (actually it's going up another few
percent
  shortly).  Then from that, Apple has to pay the full staff that runs the
  store, does all the previewing of the music, etc. Plus, they pay the
(Apple
  pays) the CC processing fees from their portion, as wall as all the
  bandwidth costs, customer support calls,etc.  And, for most of the majors,
  they do all the encoding and processing of the new material (at least they
  did for the first year to get it going).

  Within the industry, it's fairly well known, that Apple makes virtually
  nothing on the sale of the music, it's the drive of the content to sell
  iPods.  I believe that a recent news story I read said that they're making
  as much, or more on iPod sales, than they are on computer hardware sales.

  The iPod profit is a very large margin all the way through the retail
chain
  is suspect.

  --

  Glenn M.
  "John Oellrich" <john@oellrich.us> wrote in message
  news:43db849c$1@w3.nls.net...
  Rich,

  Nope it is the other way around. Well they do probably make a profit on
the
  iPod, but it has no where near the margin of iTunes.

  --
  john

  john@oellrich.us
    "Rich" <@> wrote in message news:43db18e3$1@w3.nls.net...
       Doesn't apple make money on the ipod hardware and little to none on
the
  itunes store?

    Rich

      "John Oellrich" <john@oellrich.us> wrote in message
  news:43da8441@w3.nls.net...
      Talk about stupid! Yet another money losing piece of hardware where
they
  will try to make it up in the volume ;->

      ...

      I would suggest that MS might be better off working with Creative if
  they want to blunt Apple's dominance in this arena. Get Windows Media 10
  ported to the device, and then MS could use MSN for the delivery vehicle
for
  the purchased media which is where the real money is.

      --
      john

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