When you fish out $200 for an iPhone or $500 for a PS3, have you ever paused to wonder how much the companies bore to build that gadget? Are you getting a fair deal or are the companies ripping you off? Market research company iSuppli clears all doubt by tearing down 25 popular gadgets to find out the price of the component parts and the vendors supplying those ingredients.
Don’t be surprised when you see some devices selling at a loss, for instance gaming consoles. The companies are willing to swallow losses on some gadgets in hopes that they’ll make up the difference, and then some, on sales of related gear, such as video game software. As you can see below, some manufacturers are barely breaking even from the sale of their devices. In realty, the actual profit comes not from the gadget but from the sale of related services and peripherals.
You can read the complete article on Business Week. For the convenience we present some of the popular gadgets below.
Retail price: Starting at $499
Cost of components: $219.35 to $334.95
Google Nexus One
Retail price: Starting at $179 with two year contract
Cost of components: $174
Retail price: Starting at $199 with two year contract
Cost of components: $185
Retail price: Starting at $199
Cost of components: $179.16
Amazon Kindle 2
Retail price: $359
Cost of components: $185.49
Microsoft Xbox 360
Retail price: $399
Cost of components: $470
Sony PlayStation 3
Retail price: $599 (60GB) $499 (20GB)
Cost of components: $840 (60GB) $805 (20GB)