Price question

Dicehunter

Dicehunter

Dicehunter

Soldato
Joined
19 Feb 2007
Posts
15,339
Location
Northampton
Before i start i got this info from my brother who works in the IT industry and a major game developer.
Im just wondering but why do components cost so much, an 8800 ultra costs about £20 to make and they sell it for £400, a quad extreme costs £600
yet only costs about £1 to make as they come in sheets of a thousand, most expensive parts is the packing.
Point is why dont they drop prices by 3/4, they would still make 100 times what it cost to make and there would be a lot of happy people out there, shouldnt we as awhole stop bickering amongst our selves and tell the people who make these items to lower the price as they are far to expensive for normal people.
 
I can't see how the packaging is the most expensive part to produce. Extruded(?) plastic and cardboard compared to micro components, processors etc. Even the PCB would cost a lot more to make than the packaging.
 
Research and Development, Marketing, transport costs, packaging. Are they included in the costs? I expect it's just the physical cost to produce 1 chip, the other costs would need to also be factored in.
 
wow you really dont know sarcasm when you see it, apart from the packing thing which was slight humour a bit too slight for some the rest is true, i just think its wrong that we as consumers get ripped off this badly when the products in question cost so little to make, within a few weeks they more than make back there profits as i said i just think its wrong that the working people of the wrold have to spend so much on items that cost pennies to make, id really love it if the working man/woman didnt always stick up for the fat cats.
You see on 1 ultra theres about 500% profit, on a quad 45nm extreme theres 1000% profit, doesnt anyone else think this is wrong ?
 
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I would think as large amount of it goes in to research, so they can sell you even shinier things in the future.

That said, new parts always cost silly amounts, because some people will pay that for them. Once those people have got one, they'll knock the price down a bit, and more people will buy. Repeat until superceeded by the next model.

And asking any business to lower their prices to make customers happier at the expense of their own profit isn't going to get you too far :p
 
Dicehunter said:
wow you really dont know sarcasm when you see it, apart from the packing thing which was slight humour a bit too slight for some the rest is true, i just think its wring that we as consumers get ripped off this badly.
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obviously not. Especially when it's wedged in the middle of a serious post.

It all sounds like nonsense to me anyway. £1 to produce a chip? It probably would cost that to ship the components into the manufacturing plant.
 
To be fair it happens in almost everything you buy. Take Windows Vista, cost to make must be about 5p but you're paying for the time spent in development, or a pair of designer socks, they have spent so much on marketing but the actual socks (or any item of clothing) costs next to nothing to make.
 
monkeyspank said:
obviously not. Especially when it's wedged in the middle of a serious post.

It all sounds like nonsense to me anyway. £1 to produce a chip? It probably would cost that to ship the components into the manufacturing plant.
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£1 to produce a GPU chip may sound very low but its probably nearer £10 because of the size of the die's. but its very low.
 
yay Shadez thank you for sort of going along with me, im just trying to stick up for the normal people who get ripped off on a daily basis, but obviously there a a few fat cat lovers out there.
 
The actual production costs might be about a tenner but you can't say it costs £10 to make. As above, all the R+D costs, advertising etc.

Conspiracy theories **** me off lol

no one is making you buy anything dude. Just get a 4th hand athlon XP if it bothers you that much.
 
did i say it was a conspiracy theory, no, the only reason it bothers me is that r+d is over rated and they shouldnt charge the prices they do, jesus christ im only trying to outline something but people on here are so nasty its unbelievable
 
Dicehunter said:
did i say it was a conspiracy theory, no, the only reason it bothers me is that r+d is over rated and they shouldnt charge the prices they do, jesus christ im only trying to outline something but people on here are so nasty its unbelievable
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No we're not.

Now sod off :D
 
Dicehunter said:
r+d is over rated
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:confused: How do you think these things ever get to production without R+D?

Mate, I'm not trying to be nasty. Sorry if it's come across that way. But what you've said in the first post is seriously over-simplifying the process and you're slating the big companies for something that's based on made up numbers.

It's consumerism. The only reason these things are available for you to buy, if you choose to, is that people are willing to spend that much money on them. If they weren't, then they wouldn't be made.
 
In 2000 a typical chip FAB for a major manufacture would cost around 3-4 Billion dollars to build and will be obsolete within a very short period of time.

For example an oil refinery will cost you around that and will run for at least 20 years (plenty of them are up and running after more like 40). Most chip FAB are re-tooled completely within 3 to 5 years.

All of this doesnt even include R&D or OpEx costs
People really dont see what it takes to make what they see as disposable items.
 
Dicehunter said:
wow you really dont know sarcasm when you see it, apart from the packing thing which was slight humour a bit too slight for some the rest is true, i just think its wrong that we as consumers get ripped off this badly when the products in question cost so little to make, within a few weeks they more than make back there profits as i said i just think its wrong that the working people of the wrold have to spend so much on items that cost pennies to make, id really love it if the working man/woman didnt always stick up for the fat cats.
You see on 1 ultra theres about 500% profit, on a quad 45nm extreme theres 1000% profit, doesnt anyone else think this is wrong ?
Click to expand...

It costs billions to build a fab to produce the chips, it costs tens to hundreds of millions to develop.

do you have any proof for you 1000% claim?
 
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