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iPhone X Component Costs Estimated at $357.50
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PERFECT example, but not in support of your argument. Because, apparently, way more research WAS needed. The Kinect sucked, I had one and tossed it in a drawer in my TV Cabinet. The Kinect was an utter failure. By every sense of the word “failure”. Not only killed by Microsoft as a result of that failure, but not even reborn even for the new XBox One X releasing in a day. And the Kinect had the ability to run off the processing power of a (repurposed - but real) PC /desktop computer wrapped in a console case - and it still was awful.
Design your own with OS for the same price... No? That's why.
How true. Some hardware companies in the past have got their margins to 40-45%. And to see how much margin there is in primarily software, Microsoft's recent quarter was 66.3% (anyone want to complain about the price of Office, game console?). Retail, you are looking at 3.5-4% margin.
Not reflective of iPhone margins, but recent reported quarter, Apple's margins were 37.9%. And their forward looking statement is projecting similar number for 2018.
https://www.apple.com/newsroom/2017/11/apple-reports-fourth-quarter-results/
Guessing iPhone has higher margins than Macs/watches/iPads, as that is Apple's bread and butter and funds everything else.
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I understand that Apple run the business model - look at the following example:
- Apple get massive discount from manufactures for the various parts in order to make iPhone. (Huge Profit)
- You won't get much discount from UK distribution to reseller.....
- Apple wont give you much discount if you buy bulk orders for the business.
Its typical. For any company that developed their own products they typically aim for a 100% profit margin per unit. You have to remember that R&D costs are astronomical.
And other expenses and overhead such as office space, utilities, payroll, advertising, and so on. For the most recent quarter, Apple's net income was 20% of revenues.
As a comparison, JP Morgan Chase is around 25% and Coca Cola around 17%.
Apple currently spends around 12 billion a year on R&D.
No just shows that you don’t bother to read anything anyone writes..
Apple didn’t spend $360,000,000 on another company, and work to integrate its technology into the 8. They also didn’t pay to integrate 3D Touch into an AMOLED screen for that device either.
Because a corporation exists to return as much value as possible to shareholders. They do not exist to give the customer a good value.
Truly. These numbers also don't include the cost of actually assembling the product. Apparently the pieces just fly together as if by magic.
Well no -
- 30-40% profit
- because Apple don’t tend to resale - John Lewis gets 20% - I know this for a fact as I know their resaler margin.. they don’t even offer staff discount on iPhone - they do on Mac / watch etc
- you can get up to 25% discount on business it builds up year on year and depends what you buy
If a product CAN be discounted a lot.. guess what..it was being sold too much in the first place. I had a double glazing salesman (Everest) go from 22k to 12k in an hour! ( went with a local firm for 8k )
How do you think they have that much taxes to evade, if not from these handsome profits.
I don't buy that for one minute.. Sorry. I was in manufacturing for many years and set prices for products and subassemblies. Almost all companies have a pricing structure that is pretty uniform across product lines. There would be up charges for certain things, but generally you are not going to see a huge margin swing from one product to the next.
Prices are set using cost of components which are influenced by expected volume, cost of labor which is influenced by ease of manufacturing, overhead which in apples case is static, R&D, shipping, margin, etc. Marking may be set somewhat by expected volume.
Prices are set using cost of components which are influenced by expected volume, cost of labor which is influenced by ease of manufacturing, overhead which in apples case is static, R&D, shipping, margin, etc. Marking may be set somewhat by expected volume.
Just shows you that most people don't read or can't comprehend what is in the article. This thread is the same every year, one side calling Apple thieves and the other saying the estimate is wrong.
The only thing that is debatable is how much does R&D, labour, Marketing and operating costs contribute to product cost. Since Apple just reported gross margins of around 38%, it's not that hard to figure out the other costs associated with making iPhones.
Not a lot since it was already inside the Xbox Kinect. The company who created the tech inside parted ways with Microsoft and Apple bought them. Just refinements to apply it to a smartphone.
It cost them $641 more per iPhone to develop the FaceID. So yeah that technology was lightyears ahead of its time.
Hey, the money for the gold toilets at the spaceship has to come from somewhere...you know how expensive those things are?
This is a very misleading statement and article in general, as always. It doesn’t factor in any of the R&D involved, leased patents, salaries of everyone involved, etc. While it does, in fact, have a profit margin, any business savvy person would know the cost is far more than just the parts.
inb4 the generic "OMG APPLE IS SMCAMMING US WHY ARE THEY CHARGING IT FOR 999$ WHEN JIT COSTS ONYL. 357 TO MAKE"
HS look only at the price of raw components and do not take into account other iPhone manufacturing expenses like research and development, software creation, advertising, and distribution.
I would love to know what these costs are. I bet they are pretty high.
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If you were every a farmer you would know growing a years crop is the cheap part. Operations are where the real expenses are.
I would love to know what these costs are. I bet they are pretty high.
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If you were every a farmer you would know growing a years crop is the cheap part. Operations are where the real expenses are.
And how many times has Tim Cook said these component cost estimates are BS yet every rumor site still reports on them as if they’re newsworthy.
Please feel free to send Apple an extra $200 as a TIP after you purchase your iPhone X for a job well done since you're feeling so generous.
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What's Tim supposed to say with regards to high profits? Admit to screwing over their customers?
I always find myself shaking my head at these. They’re obviously not right given the gross margin Apple reports to shareholders. Yet it gives people online ammo because critical thinking is a lost art.