Tuesday, 23 January 2007

Apple in Profit with iPhone

Apple stands to make fifty per cent profit on each iPhone sold. This high profit margin is not new to Apple as the company regularly has a margin of forty-five per cent or more in its Mac and iPod products.

iSuppli, a research firm has established that Apple stands to make fifty per cent profit on each iPhone sold. But the figure is preliminary, as no actual producti

For the iPhone 4GB version, the hardware cost totals to .85, and a total expense of .83, yielding a 50.7 per cent margin. The 8GB model stands in a more profitable ground, yielding a 53.1 per cent profit margin on a .85 hardware cost and .82 total expense. The most expensive part in the device is the NAND Flash memory, estimated at .00 per chip. The 3.5-inch touch screen at .50, and then the application processor at .50 closely follow this.

However, these high margins may not last too long because of the ever-changing competitive mobile phone industry. At a price of and , the devices are priced well above other phones in its category. So, to stay in the rat race, Apple may have to cut into margins earlier than it has in other categories.