Why would Apple spend more on identical-spec parts, being an ODM instead of an ODM customer? It doesn't make sense.

In terms of total cost, Apple spends more on average for higher-quality materials and lot ratings. But in terms of relative margins, Apple spends less, because the direct comparison of margins requires that you control for costs, which means that you have to compare two hypothetical products with identical specifications and materials costs and look at what the pricing differential would be.

It's still an outrageous exaggeration. Apple's cost/revenue breakdown for the iPhone/iPod lines shows a gross margin of not more than 50%. In order for them to be priced at "double" the competition, the average gross margin on those products would have to be less than 1%. That is not the case.

Those are corporate financials, not hardware sales. Yahoo Finance figures aren't what's important--you have to compare the SEC filings. Apple's reported margins are about 40% for Mac, 30% for media, and 50% for iPod/iPhone--for an average of 41% corporate (but software sales and xServes and iPads and accessories all stand at different levels). HP's margin includes all the businesses they participate in, not just consumer PC hardware. Dell's margins include all of their businesses. Your scope of comparison is invalid.

And again, even the wrong numbers and a made-up average, the difference between 20% and 25% is 5%, which helps your argument none whatsoever.

You are out of your flippin' mind.

Starting price: $1099: Studio 17 i5. Starting price $1299: Studio 16. Starting price $1349: Studio 17 i7. Starting price $1099: Studio XPS 9000.

Just three examples taking literally 5 seconds to find, and that's even accounting for their current sale price, as opposed to their list prices, which range from $1400-1600.

A 1:1 comparison requires that they be at the same grade. If you're using a grade AA panel and your competitor has order grade A, you can't draw any conclusions from it. The conceit of the simplified example is identical hardware at identical costs, because that's the only way you can compare margins.

The example at the end of my first post is perhaps complex and underexplained (in an attempt to simplify), so although it paints the general picture, it doesn't quite add up. Here's a very simple example that should more clearly illustrate the bottom line of the complexities involved:

Dell widget. Costs $75/unit, overhead of $15/unit. $100 sales price. Net profits: $10/unit (10%).

Apple. Costs $70/unit (in-house savings), overhead of $10/unit (efficiency savings). $110 sales price (modest price premium). Net profits: $30/unit (27%).

That's how Apple pulls in piles of cash. But note you have to control for costs or you can't do any sort of math, so your point, while worth noting generally, doesn't affect the outcome here.

There are many such touches throughout the line, but you are comparing computers with unlike supply-side costs, which you simply cannot do. Forgive the car analogy, but it's like comparing margins of an Audi and a Chevy while pretending they have equivalent materials and engineering costs.

Apple's cost savings for equivalent hardware are a result of eliminating the middleman. One of the biggest savings for them is not having to pay Microsoft (with a Windows license running 5-10% of the overall price, highly regressive on the low end, and with a large part of that price profit for Microsoft, the fact that Apple doesn't have to pay a markup to itself is a huge savings by itself, to say nothing of in-house hardware engineering and cutting out the middlemen there in many parts of that process).

Apple outsources manufacturing, but does most of its own engineering and all of its design. People talk about the big items--chipsets, CPUs, GPUs, RAM, drives, displays--coming from the same places, but forget that most of the work and cost for a computer vendor is in everything else. Where Dell's power adapters, frame and casing, trackpads, keyboards, mainboards, batteries and lots of ICs are off the shelf or reference designs, Apple does all the legwork itself and sources the actual manufacturing only. Dell has a lot of places where they're paying a supplier's margins as part of their costs). A lot of Apple's "supplier margins" go back to themselves. If you were to add in reasonable third-party margins, Apple's overall percentages would start to look a lot more like HP's.

Apple's mainboards, lots of ICs, trackpads, keyboards, batteries, power adapters, cooling systems are their own engineering and design. Most competitors have a supplier design, engineer, and produce those pieces to specified parameters, which comes with a markup Apple doesn't have to pay.

That's comical from the guy who said Apple products cost double to triple identical competing products.

I said Apple's gross hardware margin is about 40%. You say their corporate margin is 41%. How is that wrong? You claim the industry average gross margin is 20%. The documents I see show that hardware margins in financial reports is 25%--you're claiming 20%, which I suspect is a mistake on your part, confusing the electronics industry average with computing devices. Even if we were to grant your number as correct, that's only a differential of 20%. You even quoted me as saying, "Even if it were double the gross margin of their large competitors (and the difference isn't that large), it would amount to a price difference of ~25%, about one-quarter to one-eighth your claim." And that's before factoring in their lower overhead and in-house engineering at all.

How does that help you, even a little? You're still off by a factor of 4 to 8.

How? Add a zero if it makes you feel better. The numbers were small for illustration. You're the one who wanted to talk in percentages of shelf price. Accommodating Apple's larger margins means an effective cap of 15% on the price premium, as illustrated. Not double. Not triple. You're deluded for defending such a claim. I thought you were just being hyperbolic, but it seems you actually believe your absurd claim.

Say what? You're really claiming that Dell doesn't sell anything over $1000? Get real. Dell's problem is that they subsidize their bargain-basement models with all the profits from their mid- and high-end products. If they dropped their cheapest configuration across the board, they'd close the gap between their margin and industry average (but they want the mindshare and hate not being number 1 in market share, so they're aggressively trying to get it back, at the expense of profitability).

There's no question that Apple products carry a higher average price than similar products at other companies, but it's absurd hyperbole to claim 2-3x higher, especially based on gross margin. The logic fails entirely since all of this data is part of their corporate financial reports:

That would imply that, given other manufacturers having a profit margin of 1%, that Apple would have a gross profit margin of 51 to 68%. Given another manufacturer's more realistic gross margin of 25%, that would mean that Apple's profit margin would be 63%-75%. That is of course not the case.

Apple's gross margin is closer to 40% (which is indeed higher than most competitors), which means that assuming identical production costs and business costs, Apple's prices are about 15% higher as an absolute cap.

But gross margin isn't net profit, and it's net profits that are the subject of so much jealousy--gross profit less overhead, in other words. Apple does a lot of its engineering work in house (hiring an OEM to make something you designed is much cheaper than buying something someone else designed from that OEM), and a simple walk through their SEC-reported financials reveals that they also have lower per capita business costs than Dell or Acer, which amounts to a price savings--we'll say it's in the 5% ballpark (though in reality, it's probably a bit more).

That makes for an 'Apple tax' of at most 10% in shelf price--hardly "2-3x" and similar to the higher-margin premium lines at HP and Dell that subsidize their unnaturally discounted rock-bottom lines.

Even if it were double the gross margin of their large competitors (and the difference isn't that large), it would amount to a price difference of ~25%, about one-quarter to one-eighth your claim.

In other words, if a product costs Dell $100 to make and grosses 25%, with $13 overhead, net profit is $12 of the $125 sales price. The same product costs Apple $98 to make and grosses 40%, with $10 overhead, making net profits $29 of the $137 sales price. The consumer pays just about 9% more at the store (nowhere near double), but Apple ends up with more than double the profit in dollars.

The premise of your "point", such as it is, is that copyright law is insane because with a single sleight of hand you can turn something that is not copyrightable into something that is.

The premise is invalid. The volume of postings of deluded armchair lawyering, meaningless FUD, and references to a perceived "insanity" (inevitably citing examples that do not support said point) accomplish exactly one thing: distracting from the actual problem areas and totally undermining the credibility of those who advance agendas from ignorance.

"Copyright is insane because you can't copyright a gown, but if you call it art, you can" isn't even close to correct, nor is it close to a valid point. It's not pedantic, it's just calling out the obvious.

No, it cannot.

The evening gown remains uncopyrighted. You can obtain a copyright on the selection and arrangement of mannequins and gowns, as in an exhibition, but that copyright extends only to others taking the same gowns and the same mannequins, and pairing them in the same or similar combinations and the same or similar positioning.

Anyone can continue to use the gown. You didn't discover some glaring loophole or amazing inconsistency. The designs for the dresses, and the patterns for the fabrics, can be copyrighted. The dresses cannot be. Likewise, the code for software can be copyrighted as any other text, but the functionality cannot be.

It's a perfect illustration as to why Slashdot's understanding is either hopelessly ignorant or maliciously dishonest, and why the opinions popular here amount to little in the real world.

There you go again. At this point, your ignorance is obviously malicious. It is unique enough for copyright protection. It's not eligible for copyright protection for a completely different reason: because it's a useful article.

A nonsensical statement. A design patent isn't a utility patent. It's not patentable for novel utility because it's not a novel function, but an existing function in a novel design. A particular object may simultaneously have patent, copyright, trademark, and industrial design protection, but the rights afforded cover different aspects and apply in different scenarios.

You are quibbling over a name, not its procedure, in a poorly disguised attempt to cover your plain display of ignorance. You can think of it as a copyright for useful articles if you prefer, but it's no more a copyright than a utility patent. Because industrial design has formalities and procedures requiring prosecution (like patents and trademarks and unlike copyrights), it was placed under the charge of the office with the resources and infrastructure to do so, the US Patent and Trademark Office. If you take issue with the name, you should consider that copyright started out as royal letters patent (same as with patents), and that lexical treatment could easily have developed where the modern copyright might be known as a copy patent.

Nonsense. Bold though you may be with your ignorance, sheer will won't make it into reasoning.

Industrial design has been protected internationally longer than trademarks have and predates the Berne Convention. In other words, it's been part of the equation from the beginning of the modern age. The constraints in each area are intentionally designed, but not to foreclose protection into your fictionalized binary state. Art is copyrightable to the exclusion of physical utility, machines are patentable to the exclusion of aesthetics. Industrial design protects functional art--a separate discipline altogether.

All you're doing is bone-headedly arguing that design patents should be converted into copyrights, thus expanding their scope and duration.

You're internally inconsistent and contrarian. Further grasping at straws won't help your position.

It isn't. It is prohibited expressly in Section 101 of the Copyright Act. A car is a useful article, which is ineligible from copyright protection except to the extent the form can be separated from its medium. The body of a car has no value as an independent work of art except as a derivative one meant to invoke the car itself. This recursive nature bars copyright protection.

For starters, see:
http://www.bitlaw.com/copyright/unprotected.html#useful
http://www.copyright.gov/fls/fl103.html

Salient quotes:
"Copyright protection is generally not available to articles which have a utilitarian function. Examples of these types of "useful articles" would include lamps, bathroom sinks, clothing, and computer monitors. Under the Copyright Act, the only copyright protection available to these items is for "features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.""

"Designs for useful articles such as vehicular bodies, wearing apparel, household appliances, and the like are not protected by copyright."

Design is often functional. The body panels of a car are industrial design--the integration of aesthetics and engineering. They are protected by industrial design registration and NOT by copyright.

If an artist would not create the work as an independent expression of creativity, but instead is applying his craft to a functional need of a useful article, then it is not a copyrightable work. Specific exceptions have been made by statute, but they are limited to isolated cases and are not generally applicable.

Your comment is an textbook case of the IP problem--ignorance of the issues that is popularly, and blindly, reinforced as a worthwhile statement.

A copyright cannot be used to protect a useful article. A patent cannot be used to protect nonfunctional aspects of an object. A trademark has limited application and cannot protect objects clearly marked as unrelated. Thus, a design patent (which is usually known as an "industrial design" in most countries and is not a patent in the ordinary sense, having different application procedures, a shorter term, and a narrower scope of protection) bridges any gap that might arise, providing protection for the nonfunctional, distinctive design of a useful object, as well as provides an alternative to seeking independent protection of individual aspects of a creation.

There is certainly some overlap with copyright, but industrial design is not copyrightable unless its form can be separated from its medium--you can't copyright a car. You can copyright photographs, drawings, paintings, sculptures, songs, and stories of the car, but the car itself needs an industrial design registration to protect. In the US, that's called a design patent.

An industrial design registration simultaneously protects creative enterprise, promotes distinctiveness of competing products, and rewards successful integration of art and science. There is little legitimate reason to be upset about having to come up with an original design, given that it is difficult to infringe accidentally.

(And FYI, it's 'something that clearly', not 'something which'.)

No, actually it is true. Abandonment requires both placement and intent to abandon. Your trash cans aren't abandoned because you leave them in the street because you have no intent to rid yourself of them. Your trash is, because protocol dictates that you place trash to be collected in appropriate containers and leave them in the street near collection day.

If you leave property in a public place, it's not assumed to be abandoned by that fact alone. It's the first fact you can use to build such a presumption, but far from the last required.

Not just ethics, but the law of every state and nation of Western legal traditions (as well as most others). You can contact them directly if you have means to do so, or you can do it constructively by turning over the item to the police or designated state agency.

No. If the owner is not found, after the police assume control of the item, and after the necessary period of time elapses, and if your state or country allows it, you can ask for it to be tendered to you.

I'm aware of nowhere in the world where you can just sit on an item and have it become yours, except for general exemptions in some places for found property where the owner is not known, cannot be found, AND the value is less than a minimal threshold of $20-50. This is because items of little-to-no value are more easily replaced than found by their owners, the state has little use expending more resources than it's worth to return, and agencies and prosecutors have better things to do than handle civil or criminal cases against people who pick spare change up off the sidewalk. But you better be damn sure what you pick up is close to worthless.

No, in the US, those prices would be $527, $637, $747, etc.

You can't compare a tax-inclusive price with a tax-exclusive price. You just can't. Taxes aren't set by manufacturers or vendors, and that portion of the revenue isn't kept by them. In fact, one of the many additional expenses of selling internationally is tax collection and recordkeeping for that international government--which is left for the company to pay. The government certainly doesn't include an allowance for the administrative and transactional costs of tax collection.

In other words, the tax-exclusive price in Euros just about the same as the UK markup (well under 10% for international expenses). That's far from unreasonable.

They already did. It was decided in court. Did you miss the whole Psystar battle? All the armchair lawyers predicted vindication of their half-assed theories and claims...while everyone else waited with a bemused expression for the inevitable: Apple's sales model and license being upheld in court.

Both an antitrust inquiry and a lawsuit end up in the same place if they're not dismissed: federal court. But as has been said (and largely ignored) an inquiry doesn't mean that there has been an antitrust/competition law violation or even that one is suspected. It means that someone has complained and made allegations that could, if true, potentially be found to be anticompetitive.

Right now, it hasn't even been decided to open a formal inquiry. If an inquiry does happen, it doesn't mean it will be prosecuted in court. If it is prosecuted in court, it doesn't mean a violation occurred. We're about nine steps away from anyone actually demonstrating improper behavior.

In order to establish this situation as a fallacy of false choice, there needs to be a viable option outside those discussed, and the discussion must be presented as being collectively exhaustive.

Simplification for convenience doesn't always rise to the level of fallacy--propositions that have technically possible, but practically impossible, additional options aren't false choice unless the proposition forecloses other options. In other words, discussions about whether the Democrat or the Republican will win the presidency does not present a false choice unless there is a condition that there are no other candidates in existence, and not mentioning them is not the same as denying their existence.

For example, consider the response to your asking your boss for a day off: "would you prefer Friday or Monday off?" That's not a false choice fallacy. It's just a choice. Despite there being additional options in existence, and despite the fact that you might truly want Wednesday off, you have two viable options. A false choice requires that you be able to choose the unlisted alternative.

That doesn't really exist here. There is zero chance of Theora being adopted as the sole codec of HTML5. There is simultaneously a low chance that H.264 will be the sole codec, but a virtually guaranteed probability that it will be the most popular codec.

And those codecs might conceivably achieve hardware support in time to make them viable options for HTML6. But no achievement will make them viable for HTML5 to the exclusion of H.264 and/or Flash-native codecs.

The H.264 patents aren't software patents, so that whole argument goes out the window. They're method patents, which are valid everywhere there are patents, which is just about everywhere.

Where is this fantasy land? US copyright terms were expanded as a result of international treaty obligations. The Sonny Bono thing was largely superfluous, but the Berne Union, which covers most of the world (160-something out of 191 countries, in fact) requires all members to have a term of life plus 50.

It's life plus 70 in the US. The life plus 50 required by international law plus the 20 year extension.

Many countries around the world also have life+70 terms (in France, it's possible to have life+100).

I get that you wanted to rant about copyright, but you display shocking ignorance of the subject worthy of being an American. Perhaps you should be locked out of the entire Internet.