Apple is said to enjoy a 50 per cent profit margin on each iPhone sold, according to a breakdown of the handset’s component costs by research phone isuppli.

It is estimated by iSuppli that the 4GB version of the Apple iPhone will carry a $229.85 hardware BoM [bill of materials] and manufacturing cost and a $245.83 total expense, yielding a 49.3 percent margin on each unit sold at the $499 retail price.

Meanwhile, the 8GB 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.

And such high margins give Apple plenty of scope for price cuts in the face of what is expected to be extensive competition.

With a 50 per cent gross margin, would Apple set itself up for aggressive price declines?

Posted on January 25th, 2007 by admin
Filed under: iPhone News