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iPhone To Generate Nearly 50% Margin

If there is one gripe that everyone has about the iPhone, it has to be the $499 (4GB) and $599 (8GB) price tags.

So, the question is how much does each iPhone cost Apple to make? As usual, iSuppli is all over it:

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 49.3 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 46.9 percent margin at the $599 retail price.”

Keep in mind that these figures are preliminary and no definitive conclusion can be reached until iSuppli performs an actual physical teardown of the device. However, this sort of analysis is iSuppli’s bread and butter – and they are damn good at it.

So, what does this mean? Well, it means that Apple is ripping you a new one if you are an early adopter – but that’s pretty much par for the course if you are on the cutting edge of technology. On the plus side, iSuppli also believes that the steep price will set Apple up for aggressive price declines in the future.



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