What do you think the markup is on electronics anyway?
That was the PARTS cost, and doesn't include the cost of MANUFACTURING which is not insignificant, by any means.
And the mark-up on parts plus manufacturing is usually way more than 2X.
Could you build an iPad given the parts? Lets see you try - LOL!
I can tell you buy lots of Apple products...
When it comes to a computing device, I don't think the market in general is so uncompetitive as to allow manufacturers to mark up their products "way more than 2x" the cost of the major components. Sure, it would take me a long time to make 1 ipad from scratch, having all the components in front of me. But if I were making millions and had a factory in China or S Korea? Not so hard to assemble a bunch quickly and cheaply. Chips and memory go on PCB, solder in the battery, pop in the touchscreen assembly and screw it all into the case. QC/QA, static wrap, toss in a brown box (or whatever fancy packaging Apple customers demand!). Companies have been manufacturing electronic equipment for a while. It gets cheaper when you make more than 1 of something.
When I have been pricing out computers lately, I would be hard pressed to build one cheaper than I can buy a pre-assembled off the rack computer (with a warranty). Those are PC-based products, not macs. So not too sure about the 2x markup in the generally highly competitive low margin electronics/computer industry. Maybe there is a 2x markup for the early adopters, which I never am. And I never pay retail for my computer/electronics toys either.
Apple has marketing, distro, inventory, R+D, etc costs just like every other tech manufacturer. Clearly the difference between Apple and other tech companies is that Apple is setting its own price for its products and can demand a premium (see their profits lately!!
), whereas most tech companies produce commodity computing devices that have thin margins. I'm the commodity buyer, just waiting for some competition, innovation, and then I can buy a 2nd gen competing device refurbished for $200.
Maybe an apt analogy is the iPad is a 7 series BMW and all I wanted is a lightly used certified pre-owned Honda Civic. Of course the new BMW will be sleeker and more stylish and have all kinds of convenience features. But will it have a USB port and an SD port?