August 17, 2005 3:50 PM PDT

Dissecting the core of Apple's Mac Mini

The sleek Mac Mini from Apple Computer costs $499 at retail, but the total sum of the parts is less, says research firm iSuppli.

Analysts at the research firm dissected one of the Mac Mini computers and estimated that the total component bill likely comes to $274.69.

"With manufacturing costs added, the total rises to $283.37," iSuppli stated in a recent research note.

The total does not include costs for intellectual property, software, licensing fees, shipping, marketing or other expenses, so Apple's total bill for putting a Mac Mini together is actually higher.

The dissected Mac Mini included a 1.25GHz PowerPC chip, 256MB of memory and a 40GB drive. The Mac Mini does not come with a keyboard, screen or mouse and is generally more expensive than similarly configured computers housed in bulkier, larger chassis.

To cut costs, Apple adopted a number of technologies and components from the PC world. The optical disk drive, for instance, is a standard laptop unit. The chipset has also been reduced from two pieces of silicon into one.

Foxconn Electronics, which is based in Taiwan and has factories in China, likely serves as the contract manufacturer, iSuppli concluded. A number of connectors inside the box come from Foxconn.

"In general, the Mac Mini's high level of integration makes it one of the most cutting-edge systems iSuppli has ever dissected," iSuppli stated.

Analytical teardowns are one of the few jobs at research firms that require pliers.

Earlier this year, IDC scoped out the innards of the flash-based iPod Shuffle, finding two chips, far fewer than in iPods built around hard drives, and estimating the cost of materials to be about $59.

Recently, Current Analysis ripped open one of Hewlett-Packard's new consumer inkjet photoprinters and found that the $199 printer contained $199.80 worth of components.

iSuppli, meanwhile, dissected 30 phones to analyze component trends in handhelds.

43 comments

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NEWS: Apple intends to make a profit!
Is this really news?
Posted by (1 comment )
Reply Link Flag
Save yourself the hassle
And buy a more powerful $400 dell.
Posted by wazzledoozle (288 comments )
Reply Link Flag
yeah, but then we'd have to use a windows machine...
yeah, but then we'd have to use a windows machine...
Posted by muntz (34 comments )
Link Flag
$400 Dells are a little dull
The $400 bargain was debunked not long after the Mac Mini
came out: <a class="jive-link-external" href="http://www.macworld.com/weblogs/editors/2005/" target="_newWindow">http://www.macworld.com/weblogs/editors/2005/</a>
01/miniapplesandoranges/index.php

And I Quote the end of the article:

"[Endnote: When I was writing this article, I also looked at the
bargain machines from other Windows PC vendors. As I browsed
these companies websites, something popped out at me: The
different ways in which Apple and the Windows PC vendors
(including Dell) strip down their low-end models. The Mac mini
is stripped down externallyno mouse, keyboard, or display
while still being a full-featured machine internally. Windows PC
makers generally take the opposite approach: You get a monitor,
keyboard, and mouse, but limited hardware features and little to
no software. And speaking of software, why do so many
Windows writers neglect to include the value of bundled
software, monetary or otherwise, when they compare
computers? I suppose its because the free software that
comes with most Windows PCs stinksin the budget PC world, if
it comes with the computer it must not be very good. Tip to
Windows writers: Youve been led astray. The software that
comes with a computer can be free and great.]"
Posted by kirkules (103 comments )
Link Flag
hassle?
Save yourself the hassle
And buy a more powerful $400 dell.
Posted by: Mr Hanky

Then cripple it with windoze.
Posted by (58 comments )
Link Flag
...components from the PC world???
"To cut costs, Apple adopted a number of technologies and components from the PC world. The optical disk drive, for instance, is a standard laptop unit."

When was the last time Apple used an optical drive that wasn't part of the "PC" world?

Apple has been using standard ATA/IDE drives for years in all their Macs. The choice of a laptop optical only had to do with size constraints.
Posted by macslut (25 comments )
Reply Link Flag
WHAT ARE YOU SMOKING!
Optical drives, IDE, etc. are from the PC world... Are you nuts. What do you think a Mac is, a mainframe?

If by PC you mean Wintel, then you couldn't be further from the truth. These devices were developed independently of the evolution of the Wintel platform. You seem to forget that the original IBM was the first computer big blue made using off the shelf components (that is why it was so easy to clone it).

The only thing that is PC proprietory is the BIOS, the rest, are stock standard shelf items (save for the actual Intel and Microsoft architectures and components, of course)

For the record, my PC is a Wintel... I have six of them in my household (kids bedrooms, study, a couple of notebooks, etc.) on a LAN. I was considering a Mac mini for the living room (for a home made Tivo), but have been warned that it might be underpowered. Still, a Mac based Tivo would be much more versatile and cheaper than a PC based one (thats where the standard built-in software argument comes into play)

Just my view
Posted by Flytrap (82 comments )
Link Flag
Is this really news?
"Is this really news?"

right? slow news day.
Posted by muntz (34 comments )
Reply Link Flag
no, not news.
No. It's a well established fact that Apple has been completely ripping off the Mac user base with ridiculously over priced hardware for *years* now. The funny part is the 11 or so remaining Mac users gladly throw away their money for it.
Posted by Maxwell Studly (97 comments )
Link Flag
Smart business going
And I think Mac Mini's priced just right. You put in the engineering cost to fit everything in a small casing, the production cost customized for the model, the software cost, marketing costs, support costs, oh, and, yes, the IP costs, you get real value for your money.

If I estimate it right, based on this report, Apple earns more from discounts when they purchase the parts in bulk. But seriously, considering their share of the market, their price margins should be enough to compensate for possible losses. The business motive I think is sound.

That's what so great about Mac, the brand. They can be "overpriced" and it's not that bad. Makes me want to have a share of that. Hmmm... AAPL...
Posted by Mendz (519 comments )
Reply Link Flag
This is retarded.
This has got to be the dumbest News.com story I have ever read. Michael Kanellos, come on man... report something real.
Posted by leobag (13 comments )
Reply Link Flag
Imitation Journalism
A fair and balanced story would have included a similar comparison
to an actual Apple competitor like Dell. The example cited, that of
an HP printer, was totally irrelevant not only because the product
type was totally different but also because HP couldnt make a
profit selling anything. I challenge the author to provide a
comparison of component costs to shelf price for a similarly
equipped entry level Dell. Since the original article lacked this, Ill
just draw the conclusion that such an example didnt support the
journalists agenda.
Posted by aeberhar909 (4 comments )
Reply Link Flag
OMFG...Apple wanted to make a PROFIT? Those BASTARDS!!!
Seriously, what is iSuppli or whomever they are trying to prove, other than really just trying to drum up some publicity for its otherwise little known self?

If you broke down the costs of every OEM computer, car and cookie you'd uncover more DASTARDLY, um, costs. By God, I bet a Big Mac only costs 37 cents when you add up nothing more than the cost of two all-beef patties, special sauce, lettuce, cheese...but sure as ****, McD's must figure in payroll, building restaurants, marketing itself and keeping on the lights, never mind retaining an army of laywers to fend of frivalous lawsuits from teenage Fatty McGees and agenda-driven docudrama queens. And, you know, they may even want to make a tiny profit off each sandwich...those jerks.

Maybe somebody should uncover the "TRUTH" about iSuppli and see how they like it. Then again, why give them the time of day?
Posted by ProfessorDino (14 comments )
Reply Link Flag
How about some real news?
OH NO! They make a proffit?
How do you think R&#38;D gets paid?
Im so sick of these stories, how about something news worthy.
Posted by (3 comments )
Reply Link Flag
oh wait I got another story
CD's and DVD's cost pennies!
Lables sell them for $10-$20 each! OMG!
Posted by (3 comments )
Link Flag
$250 after they damage it after opening the case!
So $3 spackle blade cracks it open. And they likely can't put the lid back on right (bet they snap the little white pegs in the backnear the RF shield).

Gee, let Apple make some money! $499. Gee. that soo bad? Where is news like how Verizon or car makers keep fleecing us? Or how much is Dell service really screwing up? Or why does Toyota skimp on trucks and leave out locking tailgate?

We are smarter than the tabloid crowd!!! Feed us worthwhile info or nothing at all!
Posted by Below Meigh (249 comments )
Reply Link Flag
Uh, isn't OS X an alternative?
In the end, a Mac is a BSD box, after all.
Posted by (5 comments )
Reply Link Flag
Just who is iSuppli???
and why should anyone care?????
Posted by Earl Benser (4310 comments )
Reply Link Flag
See below
Meant to add my reply to this comment
Posted by Mister Winky (301 comments )
Link Flag
Cnet: Cheap Page Hits 'R' Us
Things must be looking bleak at Cnet if they're forced to scramble for page hits by posting stuff like this as "news."

Since they (apparently) scaled back their operations, the blogs seem to have better content than their "news" articles. But they know negative Apple articles = page hits, so you see this stuff instead of REAL news stories (they missed the worm attack by a whole DAY, and completely missed the boat on the laptop riot).

Sad.
Posted by M C (598 comments )
Reply Link Flag
You People Make Me Sick!
A 499.00 dollar Apple computer and you still imply, assert, and
even argue vigorously that Apple is stealing from their customers.

You are pathetic, larval propagandists.
Posted by Thomas, David (1947 comments )
Reply Link Flag
Funny...
... 'coz Apple is in business which basically, like all others, intends to profit. So what do you expect them to do after creating a $250 product? Sell it for $250?! Though this article is a no brainer, you are correct in implying that some reactions are far negative on the brainer scale.
Posted by Mendz (519 comments )
Link Flag
There is a difference between making a profit...
and raping your user base. Guess which description Apple falls into? And when you consider that Apple's hardware sometimes fails as often as other PC vendors Witness the extension of the warrantee on the iMac because of the borderline plague of users having issues with failed PU and video on the units. It makes me wonder where that Apple quality people keep talking about is. And don't tell me there is $200 worth of software on the thing. iLife and OS X are a fine combination but they sure as hell don't make up the difference.
Posted by Jonathan (832 comments )
Reply Link Flag
Try to buy iLife counterpart
for Windows. You can't. You can piece together a bunch of
programs that accomplish the same functions, but they will cost
more than $200 and they won't have any semblance of the
integration of iLife.

Besides, the mini does not have integrated video, a big ugly case
with a loud fan, a crippled OS (i.e. there is no counterpart to XP
Home), or any of the other "features" that come with those loss
leader PCs.
Posted by Thrudheim (306 comments )
Link Flag
iSuppli is...
iSuppli is the leading market research firm specializing in electronic supply chain information. Their expertise includes tracking component pricing, watching trends in packaging and component choice and generally keeping an eye on anything that contributes to the cost structure, time to market and production efficiency of modern electronics.

My best friend has worked there for 3 years.

-Mister Winky
Posted by Mister Winky (301 comments )
Reply Link Flag
URL
<a class="jive-link-external" href="http://www.isuppli.com/about/index.asp" target="_newWindow">http://www.isuppli.com/about/index.asp</a>
Posted by Mister Winky (301 comments )
Link Flag
Thanks for the Insight
How does that compare to other PC and laptop component costs? What are software costs v. sales prices?
Posted by (1 comment )
Reply Link Flag
So it's cheaper than an Emachine...
So basically, it's lower in quality than an Emachine but you pay Apple prices for it.
Not only that but you don't get enough ram or a decent size hard drive.
Posted by lingsun (482 comments )
Reply Link Flag
What a joke
I am the single programmer and IT manager for a company that franchises many different restaurant concepts. In each of these chains we attempt to achieve a 28-34% cost of goods sold. As an average, we look to have a 24-28% labor cost including managers, we pay between 6-8% in utilites, a few more percent in insurance, another 10-15% in repairs, maintenance, uniforms, replacement equipment and smallwares, and then a percentage fee for royalties to the mother corporations of those restaurant concepts.
So, even though the syrup for your soft drink may only have cost us 8 or 9 cents, we still have to pay for the straw, the water that becomes carbonated by the beverage equipment, the ice machine, the glass, the napkin under the glass, the table under the napkin under the glass, the light above the table, the wages of the waitress that delivered the drink, the wages of the bus person cleaning up after you, and the cost of building the location.

When you think of all the costs involved, the cost of raw materials is still just a fraction of the cost involved in the production of an item. Based on iSuppli's statement, the above soft drink should only cost you about 10 cents and a prime rib dinner should only cost about 4 bucks.

Its a shame that a news organization and a market intelligence agency tell only a small fraction of a story as if it is some huge anti-consumer conspiracy by Apple.

However, what's worse, is that people completely ignorant of the realities of business are allowed to comment.

BTW, I purchased a Ruby iMac DV when it first came out (end of 1999?)and it has outlasted two HP Windows based laptops and two Dell desktops. With the exception of updating the OS, the hard drive, adding iLife and some RAM there has never been any software added to the machine. During that same time, the computer has only been restarted for those upgrades. I wish just one of the roughly 120 Wintel boxes I have to deal everyday were that reliable.
Posted by mikegraham8 (4 comments )
Reply Link Flag
Dissecting CNET News...
65% Microsoft propaganda
35% Apple-related FUD
5% serious reporting
Posted by pmardones (21 comments )
Reply Link Flag
 

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