If you remember, we covered a story yesterday about a bill of materials done by Portelligent. They estimated that an 8GB iPhone would cost roughly $220 for Apple to make. Another independent firm has also done their own breakdown.
iSuppli tore apart their own 8GB iPhone (everyone seems so eager to tear apart their iPhones) and came up with a figure very close to the one previously reported. According to their findings, the $600 8GB iPhone probably cost Apple closer to $250 to make.
Seeing that the two companies came up with very similar answers means that they’re both likely not far off. Not many products on the market these days have such high margins. Granted, you still have to factor in costs for software, support and marketing. But remember, Apple is making a chunk of money from AT&T every time someone buys one, which drives the margin even higher. Well done Apple.
Hi Chris, thanks for sharing this. I suspect that a hefty chunk of the margin is allocated for marketing. Apple has spent a lot of money on the air waves for their product.
I am curious to know how those groups, that estimated the costs of materials, decided the overall material costs involved? I suspect Apple is getting a discount on materials for mass production. I do remember hearing Steve Jobs say that materials for gadgets are next to nothing in China, during an interview with Bill Gates earlier this year – I think. I guess what I am looking for is credibility, are those estimates from credible companies?