I don't understand why Android tablet manufacturers are failing

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senseamp

Lifer
Feb 5, 2006
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Isn't the teardown cost of an 16GB iPad 2 like < $250?

That would make it a 20% gross margin product at $300. Apple has 45% GM now. Investors are not going to like a 20% GM product cannibalizing higher margin sales.
 

vi edit

Elite Member
Super Moderator
Oct 28, 1999
62,403
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That would make it a 20% gross margin product at $300. Apple has 45% GM now. Investors are not going to like a 20% GM product cannibalizing higher margin sales.

It won't cannibalize high model sales as much as it will steal some away from lower priced Android tabs. And anyone that knows the customer retention and adoption of Apple products will do cartwheels if they see a whole new crowd of people buying into that market that they hadn't catered to before. Once you get one or two Apple products in your house, more are sure to follow.
 

Brian Stirling

Diamond Member
Feb 7, 2010
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That would make it a 20% gross margin product at $300. Apple has 45% GM now. Investors are not going to like a 20% GM product cannibalizing higher margin sales.

If Apple relied just on the profit from the sale of the device they might need 40% to keep the $500 stock price, but because Apple make so much after the sale in the app market and media they should be encouraged to go with smaller margins upfront so they can make more after the fact by selling more devices at the cheaper upfront price. It would mean somewhat less per user but with more users the net would be greater. This is the area that Apple is flat killing the competition...


Brian
 

ponyo

Lifer
Feb 14, 2002
19,689
2,811
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Apple doesn't make much from apps and media. They make their money from selling hardware, carrier rebate, and Applecare.
 

jpiniero

Lifer
Oct 1, 2010
14,841
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before ipad 1 there were rumors that it was going to cost $1000 for the entry level model. apple puts these out on purpose to come out looking cool

This is true, but people thought it would run a full OSX, Intel processor, etc. The Macbook Air is pretty close to that vision.

and an iPhone releasing at like $599

The iPhone is still around $599. You just don't notice it due to the subsidy.

It won't cannibalize high model sales as much as it will steal some away from lower priced Android tabs.

The only non-Apple tablets that are selling are the under cost ones like the Fire and the Nook. Apple obviously won't go there. $399 for an 8 GB iPad 2 seems realistic however.
 

Bateluer

Lifer
Jun 23, 2001
27,730
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This is true, but people thought it would run a full OSX, Intel processor, etc. The Macbook Air is pretty close to that vision.

I think that speculation died with the early iPhone OS builds. When they iTunes App Store launched, no one thought it'd run full OSX any more.
 

Pliablemoose

Lifer
Oct 11, 1999
25,195
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LOL, where the hell are you guys getting your numbers?

I gotta be honest, they're not reflected in reality.

Apple makes most of it's cash from iPhone sales, second from iPad sales, 3rd from PC sales, something like 3% of their cash flow is from the App store and iTunes.

The current margin on iPads is 31%, up from 30%, iPhones have about a 55% margin.

The App store and iTunes aren't a huge money generator, but they keep users in the ecosystem, the cheaper Apple devices are freaking gateway devices to the ecosystem, once you have one, it's very easy to justify purchasing more iDevices.

The margins on iPhones and iPads will decline as the industry matures and more competition forces the margins down, so Apple is great at getting cheaper devices out in volume by massaging the supply chain.

We're looking at 25% growth in the industry year over year for another 3 years or so, maybe 5.

an 8GB 10" iPad 2 at $349 will do a lot to spur other Apple products and upgrades for those that find the 8GB device too limited.

We'll likely see an 8" iPad soon, before Christmas to try to capture some of the Kindle/nook market, and serve as a gateway iDevice.
 

Bateluer

Lifer
Jun 23, 2001
27,730
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0
The App store and iTunes aren't a huge money generator, but they keep users in the ecosystem, the cheaper Apple devices are freaking gateway devices to the ecosystem, once you have one, it's very easy to justify purchasing more iDevices.

Don't they take 30% of all app purchases? I know Apple only takes home a few cents per MP3 sold, gotta pay the labels. But they're likely making a killing on app sales without any additional cost to them.
 

Pliablemoose

Lifer
Oct 11, 1999
25,195
0
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Don't they take 30% of all app purchases? I know Apple only takes home a few cents per MP3 sold, gotta pay the labels. But they're likely making a killing on app sales without any additional cost to them.

3% of Apple's profits come from iTunes and the App Store.
 

Mopetar

Diamond Member
Jan 31, 2011
8,015
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Don't they take 30% of all app purchases? I know Apple only takes home a few cents per MP3 sold, gotta pay the labels. But they're likely making a killing on app sales without any additional cost to them.

For a $.99 purchase, which probably make up the bulk of transactions, the credit card transaction fees probably eat up a decent chunk of that revenue. Add in bandwidth costs and datacenter fees and it's even more thin. There's also a lot of free apps and podcasts that still have bandwidth costs to cover, but no revenue of their own.

Add all of this up and Apple doesn't make much from their app and music store. Of course they don't care because it draws customers to their platform and keeps them their, so they make money selling iDevices and maybe a computer (and soon, possibly a television.) to them every few years.
 

bearxor

Diamond Member
Jul 8, 2001
6,609
2
81
Yeah, I'd imagine it's under $200 now, especially if they go with 8GB of storage and you've already recouped the R&D, Marketing and training costs over the past year.
 

BenSkywalker

Diamond Member
Oct 9, 1999
9,140
67
91
Kind of curious how upset people will be if Apple releases the iPad3 at 2048x1536- way below the absurdly loudly proclaimed 300ppi that is required to be a retina display?

Will be interesting to see if Apple can produce what they defined as a retina display in a 10" tablet, 2400x1800 or bust, and release it in a mass market package or if they are going to reprogram people to a rolling whatever they decide standard for "retina" classification. Was Steve Jobs a liar, and whatever new marketing angle is decided upon is the new classification for retina display? Asking these questions as 2048x1536 is well below the explicitly stated standard of 300 ppi for "retina" display classification.
 

cheezy321

Diamond Member
Dec 31, 2003
6,218
2
0
Kind of curious how upset people will be if Apple releases the iPad3 at 2048x1536- way below the absurdly loudly proclaimed 300ppi that is required to be a retina display?

Will be interesting to see if Apple can produce what they defined as a retina display in a 10" tablet, 2400x1800 or bust, and release it in a mass market package or if they are going to reprogram people to a rolling whatever they decide standard for "retina" classification. Was Steve Jobs a liar, and whatever new marketing angle is decided upon is the new classification for retina display? Asking these questions as 2048x1536 is well below the explicitly stated standard of 300 ppi for "retina" display classification.

Who knows? What I do know is that there will be rabid apple haters out with the pitchforks no matter what they release next Wednesday. Now there is something you can bank on.
 
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MrX8503

Diamond Member
Oct 23, 2005
4,529
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To clarify retina display...

Apple made up this term and never said that 300 ppi minimum is what classifies a device as "retina". They stated that a "retina" screen is when the pixels are not visible when the screen is held 10" to 12" or so away from your eyes. The iPhone 4 just so happened to be 326 ppi. So if you can't see the pixels on the iPad 3 @ 2048x1536 @ 10"-12", then its considered retina.

Whatever marketing "angle" or "lies" you think Apple is throwing at the public, if the iPad 3 has a 2048x1536 resolution, its going to be a stunning display. Android tablets aren't expected to match that kind of resolution until 2H or 3Q of 2012. Samsung has a 1600p tablet awaiting, but it won't be out until after the iPad3 and will most likely be pentile.
 

smartpatrol

Senior member
Mar 8, 2006
870
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Kind of curious how upset people will be if Apple releases the iPad3 at 2048x1536- way below the absurdly loudly proclaimed 300ppi that is required to be a retina display?

Will be interesting to see if Apple can produce what they defined as a retina display in a 10" tablet, 2400x1800 or bust, and release it in a mass market package or if they are going to reprogram people to a rolling whatever they decide standard for "retina" classification. Was Steve Jobs a liar, and whatever new marketing angle is decided upon is the new classification for retina display? Asking these questions as 2048x1536 is well below the explicitly stated standard of 300 ppi for "retina" display classification.

I thought it was 300ppi at 12"? It depends on viewing distance.

http://www.tuaw.com/2012/03/01/retina-display-macs-ipads-and-hidpi-doing-the-math/
There's a more detailed explanation.
 

Dulanic

Diamond Member
Oct 27, 2000
9,950
569
136
Who knows? What I do know is that there will be rabid apple haters out with the pitchforks no matter what they releases next Wednesday. Now there is something you can bank on.

That goes both ways If they released a polished turd for $400 some Apple lovers would praise it's existance.

BTW that is not saying their release is going to be a polished turd, I am sure it won't be.
 

BenSkywalker

Diamond Member
Oct 9, 1999
9,140
67
91
Who knows?

If the people waiting for the launch can't say how they will feel, they shouldn't ever glance at this forum- there is an Apple specific forum for love ins. If someone can't make up their own mind about what they want to see in a device, then they should stick to fan specific areas.

I'm asking a simple question. People keep talking about an iPad3 with a retina display, that was explicitly defined as over 300ppi. The rumors about the iPad3 have it falling well short of that mark. What is important to people? An increased resolution for the lowest PPI mass market tablet produced- or hitting the Apple claimed "retina" level of pixel density?

Anyone who is waiting for the tablet on *this* forum should be able to answer that question. Neither choice is write or wrong, not being able to pick what matters simply demonstrates what people are(speaking for myself, my great grandparents were fond of the 4:3 form factor back in the 1930s, an era where I personally think it should have stayed ).

Apple made up this term and never said that 300 ppi minimum is what classifies a device as "retina".

Steve Jobs was actually quite clear on that.

if the iPad 3 has a 2048x1536 resolution, its going to be a stunning display.

There were very many utterly terrible displays made at that resolution. The resolution that it is has nothing to do with the overall quality of the display. It just indicates pixel density. That is an important metric for most people, but the tens of millions of people who bought the absurdly low ppi iPhones prior to the 4 didn't seem to think it was that big of a deal.

Meh, keep missing parts of prior posts

Android tablets aren't expected to match that kind of resolution until 2H or 3Q of 2012.

I'd take 1280x720 over 4096x3072. 4:3 is an utterly terrible resolution for consumption. 1080p vs 2048x1536? Isn't even remotely close for most consumers- if you disagree look at those 4:3 monitors and TVs flying off shelves
 
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senseamp

Lifer
Feb 5, 2006
35,787
6,195
126
2048x1536 is good enough, heck even 1920x1200 is enough, that's same as professional 24" monitors on a 10" tablet. Of course the same Apple fanbois who are saying 1280x800 vs 1024x768 is insignificant are going to tell us that 1920x1200 vs 2048x1536 is like night and day.
 

MrX8503

Diamond Member
Oct 23, 2005
4,529
0
0
If the people waiting for the launch can't say how they will feel, they shouldn't ever glance at this forum- there is an Apple specific forum for love ins. If someone can't make up their own mind about what they want to see in a device, then they should stick to fan specific areas.

I'm asking a simple question. People keep talking about an iPad3 with a retina display, that was explicitly defined as over 300ppi. The rumors about the iPad3 have it falling well short of that mark. What is important to people? An increased resolution for the lowest PPI mass market tablet produced- or hitting the Apple claimed "retina" level of pixel density?

Anyone who is waiting for the tablet on *this* forum should be able to answer that question. Neither choice is write or wrong, not being able to pick what matters simply demonstrates what people are(speaking for myself, my great grandparents were fond of the 4:3 form factor back in the 1930s, an era where I personally think it should have stayed ).

I answered your question in my post. I think you have a misunderstanding of what Apple said/claimed what retina is.

Steve Jobs was actually quite clear on that.

Can you link me where Steve Jobs said a retina screen had to be 300 ppi minimum?

There were very many utterly terrible displays made at that resolution. The resolution that it is has nothing to do with the overall quality of the display. It just indicates pixel density. That is an important metric for most people, but the tens of millions of people who bought the absurdly low ppi iPhones prior to the 4 didn't seem to think it was that big of a deal.

Where are you getting the idea that Apple is using a low quality display for the iPad3? The original iPhone is your source? lol, I'd say that's not a reliable assumption.

If the iPad3 resolution rumors are true, its going to be the only tablet on the market that'll have that kind of pixel density for at least until 2H or 3Q. Accept it.
 
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MrX8503

Diamond Member
Oct 23, 2005
4,529
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0
Apparently Johnny Ive and Steve Jobs spent a lot of time with hundreds of different sizes and aspect ratio mockups before settling on 10" 4:3.
 

bearxor

Diamond Member
Jul 8, 2001
6,609
2
81
Kind of curious how upset people will be if Apple releases the iPad3 at 2048x1536- way below the absurdly loudly proclaimed 300ppi that is required to be a retina display?

Will be interesting to see if Apple can produce what they defined as a retina display in a 10" tablet, 2400x1800 or bust,

You'd throw off the pixel doubling capabilities. The next step for Apple after 2048x1536 will be 4096x3072.
 

poofyhairguy

Lifer
Nov 20, 2005
14,612
318
126
I think 4:3 is a good aspect ratio for tablets. It works better for portrait mode than 16:10 IMO.

Yeah that is probably true as I never use my Android tablets in Portrait mode.

But widescreen is better for media consumption, and I prefer it for the web.
 
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