On Jun 7, 2005, at 1:45 PM, Brian wrote:
They make tons of revenue off of computer hardware, this is true. However, the contribution margin on computers is next to nill. In other words, they cost almost or as much to produce and sell as their price on the shelf. So why does dell and Apple sell these computers? Because these computers will draw in other business in many forms. People will definitely buy software for their mac, some of it being apple software, which will bring in Apple more money with a higher contribution margin.
Can't be THAT high. Last quarter they reported gross margins of 28%; software and other only accounted for some 7% of their total revenue. CPU sales accounted for 46% of their net revenue. They gotta be making a healthy margin on those computers; *hardly* 'next to nil'
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