Apple's iPhone Profits

[dabbler]

Apple's iPhone Profits Apple and Its Margin

Everyone's iPhone crazy these days. Heck, this is a Nokia phone blog and I'm talking about iPhones. There's definitely no shortage of news for Apple's sleek handset.

So in the latest news regarding the iPhone, research firm iSuppli has estimated Apple's margins on the 8 gigabyte iPhone is about 50-55 percent. According to the company, the cost of materials and manufacturing totaled $265.83, while the handset sells for $599.

Apple, of course, has always kept mum about profit margins for its products, so it's impossible to do a 100% concrete analysis. But wow. Estimates for total iPhone sales during the opening weekend ranged from 300,000 to 750,000 which means anywhere from $90 million to $225 million dollars of profit. Quite a haul!

The news pushed Apple's stock up almost 5% in Tuesday midday trading.

http://www.forbes.com/feeds/ap/2007...?partner=alerts

[Senior]

not a bad day if I might say so.

[Senior]

keep in mind though that figure wouldn't be at all accurate unless Apple was the sole retailer for all the phones and there were no other expenses added on to that.

[dabbler]

well inital reports said 550,000 units sold... lets assume that they didn't include the share to the retailer and say their profit is half of the remainder... that's 91.5 million bucks in apple's pockets MIN

[SEAN!]

Originally Posted by dabbler

well inital reports said 550,000 units sold... lets assume that they didn't include the share to the retailer and say their profit is half of the remainder... that's 91.5 million bucks in apple's pockets MIN

dont forget r&d costs as well, they arent a direct cost to manufacture the apply but they reduce the true margin.

its a pretty shitty analysis if you ask me.

also, generally the retailer has a much higher margin on the sale then the manufacturer, so the margin is probably only around 4-10% for apple

[thebobman]

Yeah, that analysis is gawd awful. As much as I seethe at the very mention of the iPhone it doesn't "cost" $220 to make. That's just what the parts cost.

-Then you have to pay somebody to assemble them:
($0.02 in China, goooo Foxconn!)

- Pay back those heft R&D costs:
(hundreds of millions of dollars, I heard Apple nearly went in the hole to pay for the R&D)

- Package & ship the electronics:
($2.50, bulk discount fo' sure)

- Pay the bill for the hype machine:
(how much does it cost to feed a few hundred fanboys?)

- Pay store overhead
(Have you SEEN the Apple store in NY? can you imagine what the rent is on that place?)

- Pay some egotistical jackass to work the counter to sell the damned thing
(seriously, where the fuck do you get off calling a retail bitch an "Apple Genius"? That's the most elitist shit ever)

It adds up. Having said that, Apple are still acting like a bunch of profiteering assholes. Just like they were back in the Xerox Park days.

[.LxT]

Nice to know that Apple's actually getting a cutback from AT&T also on every customer. Apparently no other OEM has managed to do that before.

[dabbler]

did you even read the report? it even details over %50 profits including software development and royalties. considering how badly every phone company wanted the exclusive deal with apple, the company would HAVE to be getting half the profits. probably a hell of a lot more than that really as they can pretty much dictate how much the phone companies charge.

[j3rk]

i was excited about the iPhone until i heard it's not going to be 3rd party apps friendly.

I believe all apps have to be signed by apple, much like how brew applications are with qualicom =(

i can't confirm this, just what someone told me.

[thebobman]

Originally Posted by dabbler

did you even read the report? it even details over %50 profits including software development and royalties. considering how badly every phone company wanted the exclusive deal with apple, the company would HAVE to be getting half the profits. probably a hell of a lot more than that really as they can pretty much dictate how much the phone companies charge.

Which is the bigger 800lb gorilla? Apple with the iPhone, or the bastard offspring of Ma Bell?

[dabbler]

huh? ^^ wtf

[thebobman]

AT&T = bastard child of Ma Bell, is quickly approaching monopoly status again.
Apple = makers of the super-hyped, much sought after iPhone