June 24th, 2009 at 5:29 PM

I would love to see them tear down the cost of R&D and include that with the price of components.

June 25th, 2009 at 2:31 PM

I would love to see them tear down the cost of R&D and include that with the price of components

R&D cost of manufacturing per unit expotentially lowers the more units you sell, where as physical componets stay comparably stable regardless the amount of units that are sold.

Let’s play a game, let’s say Apple spent $1,000,000,000 to develop the iPhone and iPod Touch (Apple didn’t spend that much I know, Apple’s yearly R&D budget isn’t even that much).

Let’s say Apple onlu sold 200,000 iPhones and iPod touches, the unit cost for R&D would be $5,000. Now let’s say that Apple sells 1,000,000 iPhone and iPod touches, the unit cost would be $1,000. That’s a change of $4,000 per unit sold, the physical componets’ price most likely did not change, it’s still going to add up to $179, but the R&D price lowered radically.  Trying to put a unit cost to R&D is next to impossible withou knowing how many units will be sold and the total amount of money devoted to that single product’s R&D.

Apple places a value of $10 on their yearly major software updates for the iPhone and iPod touch. Assuming that this value is in place to recoup solely the costs of software development (part of R&D) then Apple spends about $200,000,000 a year on development for the device.