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Apple Margin on iphone 6

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Profile photo of Rakesh Bhatia
Written by Rakesh Bhatia

Apple margin on iphone 6

Apple seems to be the only company making huge profit’s from Smartphones.

iphone6-teardown

iphone 6

Took out Data from Teardown.com for iPhone6 :

  • Display Screen : $ 51
  • Processor : $ 37
  • Camera : $ 18
  • SD RAM : $ 5
  • Battery :  $ 6
  • Nand : $ 9
  • Connectivity : $ 13
  • BB + XCR : $ 28
  • Power Management : $ 8
  • Audio : $ 5
  • Non-Electric : $ 18
  • Supporting Material : $ 15
  • Assembly : $ 15
  • Supporting : $ 12
  • Other cost ( SCM ) : $ 35
  • Marketing : This is where Apple can play but lets take it as $ 25
  • Total : $ 300

    apple profit margin

    apple cost

All the costs have been inflated to highest, but still if we calculate the profitability @$ 749 ( iphone 6 – 16 GB – Sim unlocked ) . Manufacturing Cost difference between iPhone 6 and 6 plus is hardly $ 25, but Apple charges lot pf premium from customers. Every upgrade in Memory is costing $ 100 ( 16 GB – $ 749, 64 gb – $ 849, 128 GB – $ 949 )

Actually manufacturing cost of iphone 6 – 16 GB is $ 196.

Teardown.com says the two aspects of iPhone 6 Plus that increase its manufacturing costs are the screen and the battery. The larger screen on iPhone 6 Plus costs $9.50 more, bringing the total screen cost to $51, and the larger battery is $2.50 more, bringing that cost to $6.

apple profit margin

apple profit

Margin on iphone

Margin on iphone 6

The overall effect on Apple’s initial profit after manufacturing costs alone are significant. That would mean apple margin on iPhone 6 is about 73% of the $849 price (or$619.77). On iPhone 6 Plus it’s 75% of $949 (or $711,75).

One more interesting fact,  iPhone 6 models come with 16 GB, 64 GB, and 128 GB of storage (instead of the 16 GB, 32 GB, and 64 GB of prior models). Nobody is going to choose 16GB if they can help it – it’s way too small an amount for a modern smartphone. So a lot of customers will pay an extra $100 for the higher range storage – adding a bunch more money to Apple’s margins.

That’s why Apple has always been a Cash Rich company for Investors.

 

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