Assume a component cost in the iPhone 4 of around $200 (+/-). We’ll know more when the inevitable teardown and analysis happens but previous models have all come in somewhere around $200 in parts at introduction, so I think this is a safe guess.
Figure in addition to the 600K in announced pre-sales that Apple will have enough supply on hand to sell through two million iPhones in the first week (not unrealistic, again, based on sales of previous models and apparent demand).
Then consider that those numbers only include sales in the United States, and that Apple will be launching the iPhone 4 worldwide. Even if Apple currently only has enough product in the channel to sell a mere half as many outside the U.S. as it will sell here, that’s still over half a billion dollars in capital going to the hardware manufacturing for this product launch.
Apple, a company that makes its money selling things, not just licenses, has no debt. It can self-finance a worldwide product launch that costs at least half a billion dollars and still have people complaining that it should have seen this coming.
I would argue that Apple did, in fact, see this coming, and chose to limit its capital outlay to something manageable. While they could have thrown more money at the problem, bringing additional factories online to produce iPhones is itself expensive and is money they wouldn’t get back. As long as they have enough capacity to make INSERT RECORD NUMBER HERE iPhones for the launch, the only people they have to satisfy, really, are themselves. As I’ve said here before, we should all get it wrong like Apple.
Tags:
Apple
iPhone
money
Not long after the Clarendon Apple Store opened, I applied for a job there. At the time I was in there every couple months, either with a display problem in my PowerBook G4 or an overheating problem in my G4 Cube. The process with the Cube had me convinced that I was somehow playing an unplanned game of Stump the Genius. I could get the computer to crash at home, but in several days of them leaving it on in a stress test they couldn’t duplicate the problem (in the end I determined that it was bad RAM that only failed when very hot). At the time I had a decent (but not spectactular) job and the idea of going to work for Apple was intriguing. I never heard anything.
Time passed, and like nearly everyone at my old company I got laid off. I found out through a contact that it was generally better to apply in person at an Apple Store, so I dropped by and spoke to the store manager — who took my resume and a paper application, but who said I should apply online as well. So I did. I still never heard anything.
A couple years later, after yet another layoff at yet another company, I revised my resume and submitted it again. Still nothing.
Keep in mind that all this time I’ve continued to buy and use Apple products, and still had the occasional game of Stump the Genius:
- Why does my iPod sometimes skip the first song on an album?
- Why does the FireWire port on my Mac mini randomly stop working?
- Do I need to worry about how hot my MacBook Pro is running?
The resolutions to those problems are illuminating:
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Tags:
Apple
Apple Store
interview
Clarendon