Cost of production....may seem like a stupid question. - AVS Forum
Forum Jump: 
 
Thread Tools
post #1 of 8 Old 02-23-2012, 08:06 PM - Thread Starter
Advanced Member
 
MASKOAA's Avatar
 
Join Date: Oct 2006
Posts: 551
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Liked: 10
Is the price difference in high end models compared to low end models the consumer pays really = to how much it cost to make it? Like for instance if a high end model cost 4,000 and the low end is 1,000 does it really cost 4x as much to make the high end? I believe I read somewhere that computer chips/gpu's really cost very similar to make whether it be high end or low so I guess my question stands if the price difference of actual cost isn't 4x for a high end set why not release the high end set for a lower price and really put it to the competition?


like I said this may come off as EXTREMELY stupid lol but I had to just type it out to get the thought out of my head.
MASKOAA is offline  
Sponsored Links
Advertisement
 
post #2 of 8 Old 02-23-2012, 08:26 PM
AVS Special Member
 
wxman's Avatar
 
Join Date: Apr 2003
Posts: 1,673
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 43 Post(s)
Liked: 182
There is probably a bigger difference in quality between a $500 tv and a $2000 tv. But the quality between a $2000 tv and a $4000 tv probably isnt as significant. When you get between $3000 and $4000, alot of times all they add is 3D and 240 processing to a $2000 tv. Whether you think it is worth it is up to you. It must be to many, because they sell them at that price.

"The only reason people get lost in thought is because it's unfamiliar territory"
wxman is offline  
post #3 of 8 Old 02-23-2012, 10:25 PM
AVS Special Member
 
MrBobb's Avatar
 
Join Date: Sep 2008
Posts: 3,206
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 3 Post(s)
Liked: 14
Quote:
Originally Posted by MASKOAA View Post

Like for instance if a high end model cost 4,000 and the low end is 1,000 does it really cost 4x as much to make the high end?

Boy, real life doesn't work on LINEAR relationships. U got lots of schooling and blocks to go around.

Quote:


if the price difference of actual cost isn't 4x for a high end set why not release the high end set for a lower price and really put it to the competition?

Because there are more variables than cost and sell price. A few: market segment, desire (want vs need); perceived availability; business model. etc - etc - etc.

In your particular case, the high-end vendor may not want the consumer to confuse or even suggest that low end products are EVEN CLOSE to his wares, therefore he purposely build up a gap to differentiate. Plus once he sells a lot, then it's not exclusive anymore and some people are willing to pay more for Limited productions, because it makes the consumer feel special.

We have a very good example in front of us: Apple sells their computers at premium and makes like $.50 for every dollar they sell, vs other computer makers are lucky if they make $0.05 for every dollar they sell. But the generic got market share. Apple decides they don't want to compete on pricing, they want their brand to be "special" so they are OK with selling less but at a premium$.

People often ask, does $2,000 buy 2x as much quality/happiness as a $1,000 gadget? The answer is mostly NO. But if you want the best... you may be willing to put out $2,000 anyways just so that you will be the first on your block to own an iPhone5.

Solution: FREE. Explanation: I will have to charge$ you.

MrBobb is offline  
post #4 of 8 Old 02-23-2012, 10:38 PM
AVS Special Member
 
YeuEmMaiMai's Avatar
 
Join Date: Apr 2002
Posts: 1,076
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Liked: 11
MrBobb, I hate to break this to you buit the iphone 5 is NOT the best, it is at most a status symbol and in reality a vastly over priced peice of hardware. Same for most high end gagets. Apple EXCELS AT MARKETING AVERAGE EVERY DAY STUFF AS "MAGICAL"

As for the topic at hand

When it comes to chips and LCD/Plasma displays they are pretty much all created equal when they do a production run. Display manufacturers do not want to wate time retooling for many different types of panels they are typically going to run a batch of 32" 1336*768 ips or TN panels and sell then to TV manufacurers

You can see evidence of this when you buy CPUs... they are all binned according to speed and they all made from the exact same wafer per family.

Then they sort them out according to perfomance better sets usually get higher performance parts and the ability to run internet apps if you are into that kind of thing

Is it really 2K more? Honestly, proabably so if you want those features as it takes money to pay for your sent to run [insert app here] and it takes time to work out the kinks in the OS and hardware.....

Me I am happy with the LG $500 special....

Strong or weak in the end we are all dead
YeuEmMaiMai is offline  
post #5 of 8 Old 02-23-2012, 10:51 PM
AVS Addicted Member
 
rogo's Avatar
 
Join Date: Dec 1999
Location: Sequoia, CA
Posts: 30,056
Mentioned: 1 Post(s)
Tagged: 0 Thread(s)
Quoted: 21 Post(s)
Liked: 376
Quote:
Originally Posted by YeuEmMaiMai View Post

^ i hate to break this to you buit the iphone 5 is NOT the best, it is at most a status symbol and in reality a vastly over priced peice of hardware. Same for most high end gagets

I hate to break this to you, but the iPhone 5 is not for sale. The current iPhone is not overpriced. It is priced the same (or lower) than other high-end smartphones.
Quote:


When it comes to chips and LCD/Plasma displays they are pretty much all created equal when they do a production run

Then they sort them out according to perfomance better sets usually get higher performance parts and the ability to run internet apps if you are into that kind of thing

I hate to break this to you, but this notion that someone is sorting LCD panels based on performance is some sort of weird myth that is periodically perpetrated on AVS Forum and by the occasional manufacturer personnel that has no idea how fabs actually work. The average panel is tested for such a short period of time, there is simply no way of determining which the good ones are.

High end models sometimes use better spec-ed panels. They often use better filters and backlights. They will typically have better processing engines. But this ridiculously mythology of hand-picked panels is silly.

CPU chips, on the other hand, are "binned" based on their ability to support higher clock speeds. Intel, AMD, etc. have automated testing tools to figure out which of the chips are able to be labeled 3.4GHz, vs. 3.2GHz, or whatever clock you are talking about.
Quote:


Is it really 2K more? Honestly, proabably so if you want those features as it takes money to pay for your sent to run [insert app here] and it takes time to work out the kinks in the OS and hardware.....

Me I am happy with the LG $500 special....

The multiple between parts costs and retail price is huge.

If there's a $5000 TV and a $3000 TV, they are probably something like $600 and $800 to make, maybe somewhat more, but the gap between TVs sold for about $2000 different is probably closer to $200 at the COGS level.

There is no difference in HDMI cables. If you can see the picture without visible dropouts or sparklies, the cable is working at 100%. No other cable will display a better version of that picture. You're simply wrong if you think there is a better digital cable than one that is already working.
rogo is offline  
post #6 of 8 Old 02-23-2012, 11:04 PM
AVS Special Member
 
YeuEmMaiMai's Avatar
 
Join Date: Apr 2002
Posts: 1,076
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 0 Post(s)
Liked: 11
Quote:
Originally Posted by rogo View Post

I hate to break this to you, but the iPhone 5 is not for sale. The current iPhone is not overpriced. It is priced the same (or lower) than other high-end smartphones.


I hate to break this to you, but this notion that someone is sorting LCD panels based on performance is some sort of weird myth that is periodically perpetrated on AVS Forum and by the occasional manufacturer personnel that has no idea how fabs actually work. The average panel is tested for such a short period of time, there is simply no way of determining which the good ones are.

High end models sometimes use better spec-ed panels. They often use better filters and backlights. They will typically have better processing engines. But this ridiculously mythology of hand-picked panels is silly.

CPU chips, on the other hand, are "binned" based on their ability to support higher clock speeds. Intel, AMD, etc. have automated testing tools to figure out which of the chips are able to be labeled 3.4GHz, vs. 3.2GHz, or whatever clock you are talking about.


The multiple between parts costs and retail price is huge.

If there's a $5000 TV and a $3000 TV, they are probably something like $600 and $800 to make, maybe somewhat more, but the gap between TVs sold for about $2000 different is probably closer to $200 at the COGS level.

uhm yes LCDs are sorted by performance nice try on thinking otherwise

there are factors such as uniformity, color reproduction, response times, etc that can all be different even in the same production run. You ever wonder why two identical TV can be set up exactly the same and look slightly different? It's all caused by slight variences in manufacturering and this applies to anything man made.

you can take 2 corvettes right off the line and one will be slightly faster or slower than the one next to it......

BTW you totally blew right over the costs associated with R&D not to mention licensing fees/royalties

I assure that that there is a reason that set b cost more than set a when set b has things like advanced video processing, network control, streaming, 3d, etc compared to a set that does not....

btw company does not typically make huge profit per set, they make it on their every day line.........by bolk sales

it's quite one thing to guess how much something cost baseed upon raw materials in bulk vs actually computing all of the other things that have to be covered by said costs...you know like facilities, employees, taxes, shipping to retailers, etc

BTW if the company is carrying massive debt, then they are not selling the units at the right price.....

Strong or weak in the end we are all dead
YeuEmMaiMai is offline  
post #7 of 8 Old 02-23-2012, 11:32 PM
AVS Special Member
 
wxman's Avatar
 
Join Date: Apr 2003
Posts: 1,673
Mentioned: 0 Post(s)
Tagged: 0 Thread(s)
Quoted: 43 Post(s)
Liked: 182
Considering most of the Japanese TV makers are losing money, there isn't much profit for Sharp and Panasonic. In order to compete with Chinese and Korean companies, they are likely taking a loss at least with some of their lines when they contract with retailers. What the profit margin is for retailers is another story.

"The only reason people get lost in thought is because it's unfamiliar territory"
wxman is offline  
post #8 of 8 Old 02-24-2012, 11:56 AM
AVS Addicted Member
 
rogo's Avatar
 
Join Date: Dec 1999
Location: Sequoia, CA
Posts: 30,056
Mentioned: 1 Post(s)
Tagged: 0 Thread(s)
Quoted: 21 Post(s)
Liked: 376
Quote:
Originally Posted by YeuEmMaiMai View Post

uhm yes LCDs are sorted by performance nice try on thinking otherwise

I've watched videos of the plants. The TVs are on for a few seconds for humans to look at them. No performance evaluation goes on. I promise you, this is a myth.

There are different panels made with different performance characteristics, yes. But the notion that one spec of panel is "binned" like microprocessors with "really good ones" "ok ones" "meh ones" is a laugh. That would take 10 minutes per panel and it doesn't happen.
Quote:


there are factors such as uniformity, color reproduction, response times, etc that can all be different even in the same production run. You ever wonder why two identical TV can be set up exactly the same and look slightly different? It's all caused by slight variences in manufacturering and this applies to anything man made.

Yeah, it's too bad Samsung, for example doesn't bin their panels. Then their flagship models wouldn't have such craptastic uniformity. Further proof they don't "bin" the displays.
Quote:


you can take 2 corvettes right off the line and one will be slightly faster or slower than the one next to it......

They don't "bin" those either. Maybe when trying to make the high-end specialty models, they take the ones that had the best dyno tests. But mostly, it's parts, not luck.
Quote:


BTW you totally blew right over the costs associated with R&D not to mention licensing fees/royalties

I wasn't trying to be comprehensive. But assume that those are part of the costs of the better model and they are very slightly higher than the cheaper model.
Quote:


I assure that that there is a reason that set b cost more than set a when set b has things like advanced video processing, network control, streaming, 3d, etc compared to a set that does not....

I assure you the differences for those parts are single-digit dollars to tens of dollars per part. Add them all up and you might want a full-featured set has $100 more in parts. Maybe.
Quote:


btw company does not typically make huge profit per set, they make it on their every day line.........by bolk sales

They make really small profits on the everyday line. They make somewhat bigger profits on the niche line.
Quote:


it's quite one thing to guess how much something cost baseed upon raw materials in bulk vs actually computing all of the other things that have to be covered by said costs...you know like facilities, employees, taxes, shipping to retailers, etc

Again, I was doing that. By raw materials, I meant chips, filters, glass, packaging... not silicon... ITO... etc...
Quote:


BTW if the company is carrying massive debt, then they are not selling the units at the right price.....

The whole industry sucks.

There is no difference in HDMI cables. If you can see the picture without visible dropouts or sparklies, the cable is working at 100%. No other cable will display a better version of that picture. You're simply wrong if you think there is a better digital cable than one that is already working.
rogo is offline  
Reply LCD Flat Panel Displays

User Tag List

Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page


Forum Jump: 

Posting Rules  
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off