iProfit
I find the pricing of the new iPod Touch interesting in light of the current iPhone pricing models.
A new 8GB iPod Touch, with all the functions of an iPhone except the phone, costs $229. A new 8GB iPhone, meanwhile, costs $199 before the data plan is factored in.
AT&T subsidizes iPhone prices to Apple in exchange for driving sales, at rates commonly assumed to be $325 per phone sold. This means Apple sees revenue of $524 per iPhone sold but only $229 for an iPod Touch.
Does this mean the phone and 3G capabilities of the iPhone cost Apple several hundred dollars per unit in production and R&D? Are the core components inexpensive enough that the iPod Touch provides the same profit margin? Or is the iPhone simply an outrageous cash cow?
Business
It’s just tribute to the Steve, who has chosen to enrich our wretched mobile lives with his merciful reality distortion field. Or it’s what the market will bear. One of those. Maybe you’d prefer a snazzy new blackberry though?