Apple's iPhone profit margin greater than 50%

[Android1]

Each 8GB iPhone sold by Apple Inc. puts $333 more in the till than the device cost to build, a market research company said today after tearing apart the new phone.

El Segundo, Calif.-based iSuppli Corp. calculated the bill of materials and manufacturing costs of the $599 8GB iPhone as $263.83, giving Apple a profit margin of nearly 56% on the device. The tear-down analysis only spells out what's inside the iPhone, component prices and estimated cost to make; it doesn't take into account research and development or marketing costs.

Earlier this year and before iPhones were actually available, iSuppli had pegged the cost at $264.85.

As other tear-down artists have done, iSuppli named the suppliers of iPhone components. Infineon Technologies AG, a German semiconductor supplier, provided much of the core communications capabilities of the device, including the digital baseband, radio frequency transceiver and power management chips, said iSuppli. Infineon's parts accounted for $15.25 of the iPhone's bill of materials, or 6.1% of the total.

Source: Computerworld

[Grim Reaper,The]

Now, take into account R&D and marketing and that profit figure shrinks considerably.

[FX-Overclocking]

But they know that the market they are targeting is used to getting knobbed by "the hot new thing" and don't really care about price (or even how good the phone is)

[Radeon_Nut]

Originally Posted by Grim Reaper,The

Now, take into account R&D and marketing and that profit figure shrinks considerably.

Yeah, no kidding. In addition we all know software development for the interface is free, those vendors who are supplying the components are will to defer the tooling up money, and shipping is free.