Quote:
Originally Posted by Hack&Lube
I said that those with an ecosystem (ie: Amazon, Barnes & Noble) sell their devices at near break even in order to push their entertainment libraries. Apple doesn't have to sell at break even and they still make incredible amounts of money off itunes and app sales. The worst off are companies like Acer, ASUS, etc. There are always rumors they are going to get out of netbooks or they will be squeezed out of the tablet market, etc. since they don't have an ecosystem to sell and don't have that secondary revenue stream aside from the gross margins at retail for their hardware.
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At the top you mention that electronics company struggle at a 1-5% margin while Apple receives up to 35%. On a $499 tablet, a company like Asus, HP, RIM, Acer etc... are paying close to $470 to manufacture their tablets while Apple some how can make them for $320 or so. How is this possible?