The New iPhone. Apple Struck Gold?

"Apple's newly announced iPhone was announced with a steep pricetag. It seems like that price may be a little inflated to line Apple's pockets. It seems like they may have struck gold. Read inside for more."

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News <script type="text/javascript" src=""></script> Posted 19/01/07
Author: MikeEnIke
Source: iSuppli

Apple iPhone

Apple announced the official iPhone at MacWorld this year after years (literally) of speculation. The iPhone is carrying a hefty price tag also for all the innovation, the 4Gb version and 8Gb version are $499 and $599 respectively. While these prices seemed a bit high, no one thought they were over-the-top considering the awesome technology crammed into the little guy, but the iSuppli corporation begs to differ.

"iSuppli estimates the 4Gbyte version of the Apple iPhone will carry a $229.85 hardware BoM and manufacturing cost and a $245.83 total expense, yielding a 50.7 percent margin on each unit sold at the $499 retail price," said Andrew Rassweiler, teardown services manager and senior analyst for iSuppli. "Meanwhile, the 8GByte Apple iPhone will sport a $264.85 hardware cost and a $280.83 total expense, amounting to a 53.1 percent margin at the $599 retail price."

While these statistics are speculative, iSuppli is known for their generally accurate predictions on manufacturer costs of produced goods. iSuppli acknowledges this and reports that they will do an accurate analysis when the iPhone is officially released; however, they have confidence in their current numbers. So it seems that Apple is making excess of 50% on each iPhone sold, which is a huge amount for any manufacturer to make on a product, especially when it's a product that is high-priced compared to competitors.

We aren't sure why Apple has decided to charge so much. While a higher profit per unit of course results in greater profit, they will sell less due to the high pricepoint which is a big put-off for many people. We'll see if their strategy of less units more money works out for them, I for one am a bigger supported of more units less cash. Exact predictions on price can be seen below.

Price Analysis

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Most Recent Comments

18-01-2007, 11:58:07

It seems like the makers of Parallels (virtual machine software for mac) are looking into implementing 3D acceleration :) which could be nice for people who play windows games, altho there is already crossover for osx and cider (cedega for osx)
Obviously Parallels is different to cider & crossover as it is a self contained virtual machine.

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