Dave Horvath
19 Jan 2007 5:52
There's been so much buzz on the Internet lately over Apple's newest gadget, the iPhone. With whats being touted as the perfect merge between smartphone and personal audio device, the iPhone hits the market at a steep $500-$600 price tag. According to research company iSuppli, that figure looks to make Apple as much as a 50% profit on each iPhone produced. Apple appears to be betting on the brand loyalty of Apple enthusiasts to make their profit dreams come true.
"iSuppli estimates the 4GB 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, senior analyst for iSuppli. "Meanwhile, the 8GB 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," he added.
This, of course is nothing new to Apple, as the iPods themselves have been found some time ago to be priced at least 45% over their build cost. With the recent lawsuits facing Apple, perhaps they need this margin to pay off their high priced lawyers. Additionally, the brand has achieved such superstar status that people will pay just about whatever price tag they put on their products. Analysts state this price point for the iPhone puts Apple in a prime position to lower the price and still gain a profit.
Source:
Reuters