I keep hearing this but then think I saved 30% by building my own PC so it doesn't ring true. Also I would expect HP to get parts at least 10-20% cheaper than a consumer increasing this margin. And the time assembling is not that much to warrant additional costs. Maybe because I have a high end rig there are some margins here... but in this context it feels like there are decent margins there to me.
No doubt a substantial amount of that margin comes from the economies of scale where you only have a handful of SKUs with comparable sales to some of the PC manufacturers with many more SKUs combined.
Maybe not 10x but they’re certainly more than a similarly spec’d dev workstation. I guess the idea is that developers are the target market and they have a bit more disposable income on average and are more likely to want to pay extra for something like this.
$20k for something like this isn't exactly astronomical, I don't see how the pricing is absurd. Does anyone here even do hardware purchasing? Do you know how much a 1U or 2U pizza box can cost? Hint: Depending on specs, at least $10k USD, if not more.
If companies can find an application that fits their needs, the cost is justified.
that's almost all wrong. it's mostly commodity hardware, and their margins are thin only because they're a gigantic company. smaller companies can and do offer much better pricing, they just don't have the marketing budget to convince you of it.
I imagine most of the hardware is reasonably cheap, and at scale the price is probably quite low on a per unit cost but if they do come in a spectacularly low margin it'll make it tricky for others to catch up.
That would be fine if the components actually were expensive. Most people would avoid lining the pockets of the executives with their hard earned money if they had a choice.
Consumer hardware engineering these days is all about getting away as close to the edge as possible. And that'd be fine, if there was an option for better margins at a higher price. But there isn't...
Are you implying that they're particularly high? Reference please :)
I wouldn't be surprised if full list price for "brand name" vendors like IBM, HP, and maybe even Dell (presumably Oracle, too) are inflated, but in every case I've heard of, for even modest volumes, the discounts tend to equalize the prices (well, maybe not IBM) and can occasionally be competitive with SuperMicro.
I'd aregue that the only company that really makes (or at least ultra-customizes/optimizes) their own, to the point of being outside of any "class" of hardware, is Google. I suspect they're the only ones whose capex might be deceptively low because of the cost optimization.
It's not that it's hard to do the math, but it's hard to find product market fit where that inequality is satisfied. And sometimes people think they are gods gift to hardware design and can't be reasoned with to do a cost down.
The margins on everything Teenage Engineering sells must be insane. Thinking in particular of their "computer-1" itx case which is a handful of pieces of unbent sheet metal and commodity parts, all for a mere *$195*.
By the way, who’s gonna pay all those engineers who fit all those components in such a nice box?
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