Mac mini hardware cost estimated at $283

Market research firm iSuppli drilled down into one of those topics Apple does not like to talk about - margins of single products and estimated material cost. Focus of the analysis was Apple’s entry-level product, the Mac mini. As it turns out, despite the fact that the Mac mini has a rock-bottom price - at least in the Macintosh world - the Mac mini is likely to be an underestimated profit machine.

Equipped with a 1.25 GHz processor, 256 MByte DDR333 memory, a 40 GByte harddrive and a 32 MByte ATI graphics card, iSuppli estimates the "bill of materials " to come in at $274.69. Adding manufacturing, the cost rises to $283.37, the firm said. There is plenty of other cost involved such as IP, software, licensing, shipping as well as marketing and PR expenses. iSuppli stops short of adding up all those expense, but if we apply an industry-typical marketing/PR expense of 7 percent ($34.93) of the $499 retail price and common fees for all other areas, Apple pays an estimated $350 to get a basic Mac mini to the customer’s door.

Theoretically, this scenario results in a margin of about 30 percent - not bad for an entry-level system. Given the fact that the real money rings in with upgrades and services, the margin is likely to be significantly higher and closer to the 35 percent range. (THG)

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