Posted on 11/06/2017 6:18:27 PM PST by dennisw
Makes the company more money per phone than its iPhone 8 model The iPhone 8 sells for $699 and has a gross margin of 59 percent
Apple new flagship iPhone X makes the company more money per phone than its iPhone 8 model, according to an analysis, which found the iPhone X's flashier parts cost Apple 25 percent more than the iPhone 8, but that it retailed 43 percent higher.
The iPhone X smartphone costs $357.50 to make and sells for $999, giving it a gross margin of 64 percent, according to TechInsights, a firm that tears down technology devices and analyzes the parts inside.
The iPhone 8 sells for $699 and has a gross margin of 59 percent.
The finding is surprising because technology products tend to become more profitable as they age and the parts for them drop in cost.
The iPhone X is a brand new design that went on sale on Friday, to apparently strong demand, while the iPhone 8 is an update on last year's iPhone 7, which itself was similar to the iPhone 6 released in 2014.
Apple declined to comment on TechInsights' analysis.
Apple is unique in the electronics industry for its ability to charge a premium price for its latest devices and for its ability to maintain that price even when selling devices through third parties like telecom carriers, said Al Cowsky, the costing analyst for TechInsights, which planned to post the results to its site late on Monday.
(Excerpt) Read more at dailymail.co.uk ...
DETAILS WITHIN - This goes against what I have been reading here. That the margin on iPhone X was smaller than on 8.
MOST lower end manufactured goods have a retail price of roughly 4x what they cost to manufacture. At the higher end, the margins get much tighter.
There is nothing wrong with that, as long as it performs as promised and people are buying it voluntarily.
One thousand? Nope,not even if I was a billionaire.
Does not seem complicated - if it’s worth $999 to someone, buy one; if it’s not, don’t. If somebody else can make and sell one at a price closer to three-to-four hundred bucks, buy theirs.
Add seventeen percent and that is what the real price should be.
A 59% margin is not too much. It used to be wholesalers gave retailers a 100% markup margin so they would carry their products.
This whole Chinese race to the bottom price war has retailers often with nothing but a 2%, that’s right, 2%, margin.
Firearms often have $10 or $20 markups on $700 Firearms.
Booze has nearly nothing of a markup. A case of beer can be just 10 cents!
If Apple, or any other company, can get 59%, more power to them. No one gets ahead on 2% markups.
I do not own an Apple product. I hate Cook, but good for them. Apple is forcing no one to buy its product. Good for Apple—that is what is called freedom and free enterprise.
How do they calculate the price to manufacture? Do they allocate all the research, development, and corporate overhead to each iPhone? If you don’t charge your overhead back to your actual products that produce revenue, your accounting is not really accurate.
I paid $39.95 for my ZTE Maven smart phone. I bought it from Dollar General. It does everything I NEED. I can do internet, video’s, use any Android based App, text, voice, photo’s, play games, etc.
Like those little Bose Cube speakers.
“One thousand? Nope,not even if I was a billionaire.”
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But in 6 months you have the privilege of shelling out $1500 foe the new I-toy 11 for $1500 and you can use the 10 for your latest I-toy doorstop! Whatta deal!!
“Add seventeen percent and that is what the real price should be.”
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You should go into the smartphone business. At that level of markup you won’t be able to keep up with demand. Assuming, of course, that you make a desirable product of quality.
Ping.
Your answer is no but the whole idea is to make a lot of money via sales and larger margins so that investments in research plus overhead can be recouped. Then you make profits, after taxes.
Taking a business course that’s the expected yield after cost of doing business.
That cost does not include the programming and testing that went into new features like the facial recognition, or the development of some of the new hardware features. If the device is a hit, Apple will make oodles of money, but they are not netting 65% on each sale.
That is not the way accounting works. Notice that word used in this article is margins, not profits.
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