Apple iPhone = 50% Gross Profit January 18, 2007
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Analyst firm iSuppli,which runs an interesting Teardown Analysis of new IT toys and gadgets, has put together a preliminary analysis of the Apple iPhone, speculating that each one of the shiny little things will generate nearly 50% gross margin.
By any standards, that’s a lot of cash but then Apple is used to pulling down a healthy 45% on the iMacs and iPods. iSuppli has created a functional Bill of Materials (BoM) estimate for both versions.
“iSuppli estimates the 4Gbyte version of the Apple iPhone will carry a $229.85 hardware BoM and manufacturing cost and a $245.83 total expense, yielding a 50.7 percent margin on each unit sold at the $499 retail price,” said Andrew Rassweiler, teardown services manager and senior analyst for iSuppli. “Meanwhile, the 8GByte Apple iPhone will sport a $264.85 hardware cost and a $280.83 total expense, amounting to a 53.1 percent margin at the $599 retail price.”
Check out the BoM here. Oh, and if you’re in the market for a music phone but can’t decide, things are only going to get more confusing with 835 music phones – yes 835 - due for launch in 07.-Martin Lynch
Editor and Contributor | Martin Lynch
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Comments
lets say it together..."millions in development costs!" now lets try something else . . "no more iphone stories so we make up crap that makes no sense, that better.
which might some day cover the cost of the years of R&D.
ever do the same analysis on a medicinal tablet? think about how much cancer medication costs and how much it must cost to make a tiny little pill.
(enough with the Apple hatin' fellas)
apple hating? where exactly in that story is apple hating? It's true, apple fans are waayyyy too sensitive...
Ok so they make 50% profit, so what! Everybody will still buy it, but hopefully overtime they will reduce price.
To be honest, i'm glad this information has come out! Because this only shows that there is scope for the iphone to be reduced in price..
Andrew
www.specsfinder.co.uk
Everyone seems to be shocked by the word "profit." If one thinks about it 50% profit isn't that bad. Apple are a business, so they need to make money to keep their great collection of Apple products going. I have never done this, however I know some people who would willing walk into a sports shop and come out having bought a pair of Nike shoes priced at €150 (100 GBP or 200 USD). Now does one think that it cost Nike €150 to make that pair of shoes? Unlikely, one would be shocked if it cost them even €5 (3 GBP or 6.50 USD).
Just think about that for a moment.
So nobody has considered yet the incredible marketing and promotional costs that will ensure the successful launch.
OK, the iPhone will get tons of publicity from blogs but they will still need to spend tens of millions of dollars.
Take into account the development costs and you have a rapidly (and significiantly) reduced margin.