joniPhone to have 50% profit margin
January 21st 2007 20:46
Category: No Category
Apple's iPhone has been the subject of some of the biggest controversy in consumer gadgets since the leadup to the Playstation 3 launch. From Intel's claim that the heart of the iPhone is an Xscale chip, to Ballmer's proclamation that the upcoming mobile is "the most expensive on the market," nothing can dissuade Apple's potential fanbase. But the latest news about the Apple-branded smartphone may knock even the most dedicated Apple fanboys from their pedestals.
In the face of Apple's ever-climbing profits, market research firm iSuppli has estimated that the iPhone may gain Apple a 50 percent gross margin per product. When Steve Jobs announced the iPhone close to two weeks ago, the advertised prices were US$499 for the 4gb model and US$599 for the 8gb. iSuppli, however, has estimated that the manufacturing costs for the iPhone are $245 and $280 respectively, allowing for 49.3% and 46.9% gross profit margins.
Granted, the estimates are in fact estimates and probably don't take into account the costs of the yet-to-be-known iPhone processor. Still, Apple's financial strategy isn't new - the consumer gadgets corporation has in the past managed to pull of gross profit margins of close to 45% for products like the iMac and the iPod Nano. Nevertheless, for a phone that isn't even 3g-capable, has market standard camera quality, and whose only drawcard is an easy-to-use interface, the prices remain a little too high.
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Comment by Cibbuano
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Like Jobs said, they want 1% of the market... and they'll make great profits..
Comment by Jimbo
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