Component Cost: Profit And Loss

How much does it cost to make those heavily sought after consumer electronics gadgets? How much do big companies actually profit from a particular product?


Profit Analysis: What the company is making or losing…
Apple iPhone 3GS / + $19.84
Palm Pre / + $62.16
Amazon Kindle 2 / + $173.51
Research In Motion BlackBerry Storm / + $46.11
Apple iPod Touch (First Generation 8GB) / + $152.00
Microsoft Xbox 360 / MINUS $71.00
Toshiba HD-A1 HD-DVD Player / MINUS $201.00
Apple iMac, 17 in. / + $401.00
Sony PlayStation 3 20 GB / MINUS $306.00
Source: Yahoo!Finance


The Loss Leader Strategy
The loss leader is a product sold at cost, or even below cost to stimilate profits on other sales. This is marketing concentrated on pricing strategy. The goal is to get customers to buy other products while shopping.

If done correctly, this strategy works. Done incorrectly, you can lose big money.