iPhone costs Apple $250? According to Apple Proxy Statement

Discussion in 'Apple, Inc and Tech Industry' started by amx, Jan 24, 2008.

  1. amx macrumors newbie

    Jul 17, 2007
    So I was going over the Apple Proxy statement from that was jsut released and noticed something interesting on page 22. Page lists all the executive compensation, damn those guys get a comfy salary.

    "This amount represents the Company’s contributions to Mr. Cook’s account under its 401(k) plan in the amount of $13,500 and a tax gross-up in the amount of $250 for an iPhone given by the Company to each of its employees, including the named executive officers, other than Mr. Jobs. "

    Just found that interesting.

    Link to the statement. http://www.apple.com/investor/?sr=hotnews?sr=hotnews.rss

    What do you guys think?
  2. mikes63737 macrumors 65816

    Jul 26, 2005
    This has been known for a while - Apple has a flat-fee repair service for the iPhone, and it costs... shockingly... $250.
  3. JNB macrumors 604


    Oct 7, 2004
    In a Hell predominately of my own making
    That's the monetary value Apple places on the iPhone for IRS/SEC purposes. They could have as easily said $1. Doesn't provide significant insight to the true cost, but is teasingly within reasonable range, thereby driving speculators (and more importantly, competitors) nuts. Don't read anything into it.
  4. CashGap macrumors 6502


    Sep 15, 2007
    Music City, USA
    The $250 tax gross-up represents his estimated personal income tax liability for the gift of an iPhone.

    iPhone retail value at launch $599, given to him free, 30% ($200) federal tax liability estimate, 8% ($50) state and local tax liability estimate.

    No insight into the cost of the iPhone in this statement. Rather, an estimate of income tax liability for a $600 gift.

    Another example, I worked for a company that often gave away $50,000 cars as incentives for good work. Not a company car... a gift, titled to you. We'd do a $15,000 cash bonus to the employee to help offset the tax liability.

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