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iPhone XS Max Component Costs Estimated at $453 [Updated]

A fairly normal cost of something in a business is 300% markup.

Example: I need a rock put in my yard.
If the rock costs $30. The first 100% equals the cost of the thing you are buying.
Then labor comes in to play so you roughly charge another 100%, now the rock is $60.
Then you need profits in order to grow the business so it goes up another 100% so the rock ends up costing you $90.

Without the profit section you are going to normally just going to break even every week after purchasing and labor.

Again it is not completely accurate but fairly close to many items being sold.


So if that phone costs roughly $450 x 3 = You are looking at close to $1,350
 
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The last two paragraphs reek of a desperate attempt at explaining away the exorbitant cost of the new iPhones, while also attempting to fill the reader's head with the idea of "The build estimates aren't accurate... so don't get your panties in a wad over the outward appearance of this effing HUGE profit margin."

If I didn't know better, I'd swear this article was written by either A) a serious Apple apologist, or B) an Apple employee whose job is PR and damage control. It's obviously an attempt at justifying the crazy price tags on these mature, commodity, over-priced pieces of tech. It's quite disgusting, to be honest.
 
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sumo.do said:
Nice profit.
Click to expand...

R&D, manufacturing, marketing, packaging, shipping, compliance, and much more are all NOT included in that price. All of those things cost money too and are part of the final cost of the product.

The material costs of a house or a car are FAR less than the retail price. Again, there's a lot more to them than simply buying a bunch of wood and steel.
 
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Cankoda said:
Well you sell enough of anything it’s gna be good money, thats business, sorry if I misinterpreted you comment
Click to expand...

Well not exactly. Apple doesn’t own smartphone market share, they own profits. It’s gotta come from somewhere. All good though, just surprised at everyone jumping down my throat. We all know Apple makes a ton of money off iPhones. Nothing wrong with that, it’s a business, as you said.
 
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mmomega said:
A fairly normal cost of something in a business is 300% markup.

Example: I need a rock put in my yard.
If the rock costs $30. The first 100% equals the cost of the thing you are buying.
Then labor comes in to play so you roughly charge another 100%, now the rock is $60.
Then you need profits in order to grow the business so it goes up another 100% so the rock ends up costing you $90.

Without the profit section you are going to normally just break even every week after purchasing and labor.

Again it is not completely accurate but fairly close to many items being sold.


So if that phone costs roughly $450 x 3 = You are looking at close to $1,350
Click to expand...

You're kidding right?!
 
alexnyc8 said:
You and every other teen and tween on the block. :)
Seriously though, if people could truly afford the cost of these, i would have no issue. but people get into debt for these, then they default on it, then taxpayers bail them (well their banks really) out. Be it iphones, cars or real estate - personal responsibility is long gone
Click to expand...
It is the RF waves man from iPhone batteries causing brain damage, the reports are wrong.
 
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mmomega said:
A fairly normal cost of something in a business is 300% markup.

Example: I need a rock put in my yard.
If the rock costs $30. The first 100% equals the cost of the thing you are buying.
Then labor comes in to play so you roughly charge another 100%, now the rock is $60.
Then you need profits in order to grow the business so it goes up another 100% so the rock ends up costing you $90.

Without the profit section you are going to normally just going to break even every week after purchasing and labor.

Again it is not completely accurate but fairly close to many items being sold.


So if that phone costs roughly $450 x 3 = You are looking at close to $1,350
Click to expand...
sure if you're selling 10 rocks. But when you start selling thousands of rocks, things start to change.
 
groadyho said:
Judging by Apples value either tjey make alot more than 20%, or the cost are less than reported considering they buy in bulk and use cheap labor or most of their profit comes from mark ups on accessories including storage options. Probably all of the above, either way it all leads to an over priced product.
Click to expand...
It’s not overpriced. If it was, people wouldn’t buy it.
 
Chrjy said:
Do you really believe, as a sweeping statement, that all businesses return 300% profit?
Click to expand...
First I did not state this is 100% accurate I said roughly.

I also said, 300% from the time you buy a product until you sell it.

If you break the pricing structure into 3rds, the first 3rd covers you buying the item or parts.
The 2nd 3rd covers your time and labor or whoever you are paying to sell the item.
The final 3rd is the profit you can put in the bank.

So in the example of a $30 rock ending up at $90.
You would pay $30 for the item.
Pay your employees or staff, $30 to sell the item.
Then you put $30 in the bank.
 
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alexnyc8 said:
Vote with your wallets people. If you go out and buy one on day one Apple will continue raising the prices.
The people here who attempt to justify Apple price increases are funny nevertheless. Yes Apple can charge whatever the market will bare (at least as long as there is 0% financing subsidy such as common in US), luckily for me though, my 7+ works like a charm (previous one was a 3GS) and i intend to keep it until it falls apart :)
Click to expand...

What do you think consumers have been doing, if not voting with their wallets?
 
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mmomega said:
First I did not state this is 100% accurate I said roughly.

I also said, 300% from the time you buy a product until you sell it.

If you break the pricing structure into 3rds, the first 3rd covers you buying the item or parts.
The 2nd 3rd covers your time and labor or whoever you are paying to sell the item.
The final 3rd is the profit you can put in the bank.

So in the example of a $30 rock ending up at $90.
You would pay $30 for the item.
Pay your employees or staff, $30 to sell the item.
Then you put $30 in the bank.
Click to expand...
Regardless of what others say, that is pretty accurate statement on your part.
 
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rafark said:
sure if you're selling 10 rocks. But when you start selling thousands of rocks, things start to change.
Click to expand...
or you keep selling those rocks at the same price until the people start changing their buying habits.

The pricing can definitely change with quantity, again that is why I stated it was a roughly accurate representation of why an iPhone may cost $443 in parts and end up at $1300-1400 to the customer.
 
mmomega said:
First I did not state this is 100% accurate I said roughly.

I also said, 300% from the time you buy a product until you sell it.

If you break the pricing structure into 3rds, the first 3rd covers you buying the item or parts.
The 2nd 3rd covers your time and labor or whoever you are paying to sell the item.
The final 3rd is the profit you can put in the bank.

So in the example of a $30 rock ending up at $90.
You would pay $30 for the item.
Pay your employees or staff, $30 to sell the item.
Then you put $30 in the bank.
Click to expand...

Ah I see, I thought you meant that businesses would net 300% of the cost of an item after all is done and paid! ;)
 
That may be an ESTIMATE of the parts cost, but how much is FOXCON charging Apple for every phone it builds? Apple doesn't build these phones - FOXCON does. THEY take the first chunk of this perceived profit. To that you add everything else- the loading and shipping to the docks, loading and shipping to the US. Unloading here, shipping to all the stores, unloading and warehousing and stocking the shelves, then you get to pay all the people in the stores and the rent electricity and taxes. Add all that up and see how much you have left. You will have a bunch for sure but it will be a lot less than the cost of the retail cost of the phone minus $443.
 
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KrisLord said:
We already KNOW this, or data that points towards this.

$443/$1099 =40%

Apple has a gross profit margin of about 38% so add on a bit of selling cost and your at 38%. They’re not going to diverge from that for a new iPhone, as the iPhone is the main product that drives that percentage.

R&D costs are not part of gross profit so they’re in the next section of the income statement.
Click to expand...
But that doesn't make them not affect the NET Profit.
 
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