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According to a recent report, the iPhone 4S hardware component costs is $170 for the 16GB version and $220 for the 32GB model giving Apple impressive margins over 70%
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According the analyst Chris Whitmore at Deutche Bank, Apple are paying $170 for the hardware components used in the iPhone 4S 16GB. The 32GB version is a little more expensive where components are estimated to cost $220. Apple iPhone 4 8GB component costs are approximately $140. Whitmore estimates that Apple has 71-73% manufacturing margins on the iPhone 4S. No wonder why Apple is the most valuable company in the world. Apple spend approximately 600 million USD on research and development per quarter and since the iPhone 4S basically is just a more powerful iPhone 4 we was expected something more during the iPhone 4S announcemet last week.However, iPhone 4S pre-orders still reached one million during the first day. The previous 24 hours pre-order record was held by the iPhone 4 with 600,000 devices. It seems like everyone is going for the Apple brand even though the disappointment when it was known that the iPhone 5 not are coming out this fall. If you are at the end of your contract and want something out of the ordinary, you should consider another phone model. It all reminds us of Nokias hegemony a decade ago.The weekly publication The Economist published a similar break down of the cost of iPhone 4 hardware parts before the iPhone 4S was announced. Their conclusion was that the cost for 16GB iPhone 4 hardware components was estimated to be $178 USD. After manufacture cost and hardware parts was bought, Apple was left with $368 per iPhone.Apples Q3 financial report reveals that almost half of the revenue comes from the post iPhone and Related Products and Services which does not include iPad, iPod or music products. A not well known source of income is from the accessory business. Every company wanting to make accessories for the iPhone has to pay for the use of certification logos, via the MFi program (Made for iPhone/iPad/iPod). After signing a NDA contract, accessory makers will receive benefits such as Tech info, Product Certification, MFi Logos, iPhone/iPod/iPad compatibility logos. Typically, a 20-25% royalty of the accessory price are collected by Apple. When you buy a $100 speaker for your iPhone, Apple receives $20.source, source (PDF), source
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Posted: 2011-10-11 03:42:23
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Ah well so customers are being ripped off with the high price of the iphone then
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Posted: 2011-10-11 07:50:00
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Yeah, and what's more they are happy about it That's the phenomenon of Apple
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Posted: 2011-10-11 10:50:53
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INCREDIBLE! It must be so sweet to be a an Apple shareholder.

Companies around the world can only wish to have such high margins, Apple just keep amazing me, its not their fault people still pay the high price, most CEOs wish their companies could be operating like this, Steve Ballmer must have thrown his WindowsPhone at his Windows computer when he read this, and Stephen Elop still can't decide between throwing the SeaRay, N9 or N8...bet 100bucks he picks the N8
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Posted: 2011-10-11 12:54:55
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Thieves
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Posted: 2011-10-11 13:13:20
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Apple can charge whatever they want for their products. No one is forced to buy any devices from them. Like every other public company, Apple is rising the prices as far as they can.
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Posted: 2011-10-11 13:27:03
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True. They know the people want it & will pay anything to get it within their means. And paying for high priced contracts too. Whoever said were expensive??

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Posted: 2011-10-11 13:28:31
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Ok, I was not gonna comment, hoping people would notice the obvious slant of the article.

I love how "analysts" only state component costs and not R&D, Marketing, Distribution, Logistics, etc...

If all employee salaries were part/component based... then it would just be the cost of the paper reports and ink they submit.

Since when has a company ever charged AT COST?

How much does an Intel chip cost, at cost? How much is a sliver of silicon?

Restaurants should only charge the cost of ingredients. Waiters have no product output and shouldn't be paid at all.

Consultants shouldn't be paid either, except for the cost of the paper reports they give in.

Businessmen should only be paid for the ink used to sign contracts.

A business is free to charge however much they want for their products. People are free to buy them or not. Regardless of how much people complain about Apple's prices, they still buy it... at the end of the day... actions are what matter.

I don't own an iPhone. Not because I don't like Apple, but because I don't think it's good enough for me. I see its appeal to others, much like how a Rolex isn't more accurate than a Casio watch... but people will pay a lot for a Rolex, but not more for a Casio.

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Posted: 2011-10-11 14:31:52
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I hope it was clear that this was manufacture margins and not total earnings. Of course Apple spend some of these left overs on marketing, R&D, packaging, shipment etc. but nevertheless their quarterly earnings was 3.5 billion USD of the 28 billion revenue. Not bad at all
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Posted: 2011-10-11 16:58:53
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Hey laffen, although it was clearly stated in the article that it was manufacturing costs... you can see the writer's obvious slant towards implying how big a margin Apple is making... by actually NOT stating how much Apple actually makes... he only makes a biased assumption using incomplete data to stir negative emotional responses.
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Posted: 2011-10-11 17:36:48
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