The gross profit on the iPad Mini is something like 150%, so gross margin over 50%, amortized over the annual run. So not only are margins increasing, the annuity of the phone upgrade cycle is proving to be steady and large. Even if growth drops below 100% due to the large numbers after China is first ever saturated by Apple, the growth rate is likely to drift toward 20% over 5 or so years. That means we have 2-3 more good years for AAPL.
Rocketman
Gross margin for 3Q2012 (Apple 2012 fiscal 4Q) was 40% and management project the gross margin to be 36% in 4Q12 (fiscal 2013 1Q). If Ipad mini is significantly below corporate average (which is project to be 36%), how do you get to over 50% gross margin for Ipad mini? How do you get 150% for gross profit ? do you know gross profit is defined in $ term and not a percentage?
Gross margin is revenue of good - cost of good. But cost of good is way more than the BOM (bill of material) tear down that is floating around the internet. Cost of good also include profit to Foxcon, part spoilage (i.e. part broken during manufacturing), rework cost, inventory cost, overhead, transportation, any tax associate with the part, regulatory cost for manufacturing or approval for sales in a country, customization (LTE band is different between country and the product has to be builded differently), warranty cost, all the cost of return that everyone want to try out the Ipad mini for 14 days and then return it, distribution cost (all the Fedex, UPS, Target, Walmart, Apple store profit) etc. etc.
If you like to talk about Apple finance, can you at least open up one of the quarterly earning report and go over it at least once?
http://www.phonearena.com/news/Reut...le-will-introduce-the-Apple-iPad-mini_id35504
During the recent patent trial with Samsung, Apple said that its profit margin on U.S. sales of the iPad ranged from 23% to 32% from October 2010 through March 2012.
http://seekingalpha.com/article/952...arnings-call-transcript?page=5&p=qanda&l=last
We also added the iPad Mini to our iPad line-up. The iPad Mini has the full iPad experience, and we priced it aggressively at $329, delivering incredible value to our customers. Its gross margin is significantly below the corporate average.
http://en.wikipedia.org/wiki/Gross_profit
Gross profit = Net sales - Cost of goods sold