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Apple iPhone 4S is done at Apple's highest ever manufacturing margin of 70%

Posted: , by Daniel P.

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Apple iPhone 4S is done at Apple's highest ever manufacturing margin of 70%
Proving once again that its incremental annual upgrade strategy still works flawlessly, Apple is said to squeeze the astonishing 71-73% manufacturing margins out of the Apple iPhone 4S.

According to a Deutsche Bank analyst the 16GB unit carries $170 Bill of Materials (BOM), whereas the 8GB iPhone 4 goes down to $140.

It's not only BOM, we have other expenses like R&D as well, but when it's all done and dusted, Apple will probably be making north of 60% on a single unit, considering its carrier subsidies per 16-gigger are about $450, the largest margin in the industry, and its own personal record.

Apple iPhone 4S is done at Apple's highest ever manufacturing margin of 70
This comes hot on the heels of the news that, thanks to its appearance on a new carrier and a lot of iPhone 3GS folks upgrading, Apple managed to break its own sales records with 1 million handsets sold in 24 hours, compared to the iPhone 4's 600 000 last year. So, in just 24 hours, Apple is at least half a billion richer thanks to its incremental update of the iPhone 4 - a textbook business strategy, indeed.

The thing is that the inherited components from the iPhone 4 are now cheaper to manufacture due to scope, volume and ironing out the kinks. The dual-core A5 has been already developed for the iPad 2, so its production price is just slightly above that of an A4, and Apple has obviously kept the 512MB of RAM, as one Infinity Blade 2 developer indicated. The camera upgrade from 5MP to 8MP and the "world" baseband radio come at only a few bucks difference wholesale, as comes the dual-antenna design.

All that, of course, doesn't stop Apple from charging $100 extra between the 16GB, 32GB and the 64GB versions, not to mention the old cases most likely won't fit on the slightly redesigned phone. Putting it all together - priceless.

via AppleInsider

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posted on 10 Oct 2011, 10:10 11

11. davecann2 (Posts: 460; Member since: 15 Mar 2011)


Dude.... didn't you already post this comment in another article. Maybe your right... Maybe a lot of people who preordered the phone are sheep. What are your comments make you out to be? My guess is your one of the following...

1. Hater
2. Troll
3. Jealous

Or maybe you’re the sheep following Android?

posted on 10 Oct 2011, 10:31 12

14. Lucas777 (Posts: 2137; Member since: 06 Jan 2011)


no he is just a valueless commenter who really doesnt do anything…

posted on 11 Oct 2011, 09:12 1

67. Alantef (Posts: 288; Member since: 14 Sep 2011)


to both davecann and lucas......as i quote from the great Samuel l Jackson.......“If my answers frighten you then you should cease asking scary questions.”

posted on 11 Oct 2011, 09:13 1

68. Alantef (Posts: 288; Member since: 14 Sep 2011)


and “I don’t remember asking you a goddamn thing!”

posted on 11 Oct 2011, 10:57

71. davecann2 (Posts: 460; Member since: 15 Mar 2011)


???? Ask me a question???
No you didn't! You did in fact make a comment of which I replied too because it was useless, factless, baseless and ignorant... You Sir are an idiot.

To make my point even clearer... you gave yourself a thumbs up! STUPID STUPIS STUPID

posted on 10 Oct 2011, 12:16 4

29. jogutier (Posts: 324; Member since: 12 Feb 2010)


If he means that jobbs death help this spur. I will have to agree.

posted on 10 Oct 2011, 17:25

49. ardent1 (Posts: 2000; Member since: 16 Apr 2011)


These are sheep with money -- that makes a difference!

posted on 10 Oct 2011, 09:12 1

2. John (unregistered)


Well, not only BOM and R&D, there are also things like - support & services, assembly, shipping, licenses, taxes etc., which add up to the cost price.

posted on 10 Oct 2011, 09:43

8. Daniel.P (Posts: 106; Member since: 14 Jul 2011)


True - Apple has incredible cost discipline which allowed it to keep OpEx under 10% of revenue last quarter, and general R&D hovers around 3% or less, probably less in the case of the iPhone 4S. The German analyst estimated 71-73% gross margin, which given the above numbers makes the iPhone 4S operating margin hover around the 60 percentile, which is truly something...

posted on 10 Oct 2011, 10:30

13. John (unregistered)


Thank you Daniel for clarifying that.

posted on 10 Oct 2011, 10:35 8

18. remixfa (Posts: 14255; Member since: 19 Dec 2008)


insanity.

Go apple for being a capitalist. The market will price the equipment. If the market doesnt like it, the equipment will drop. Obviously the market doesnt care about pricing. It would be interesting to see the spread on the different versions of the i4s as far as which carrier and GB iteration is the fastest selling. Obvious answer would be ATT and 16gig, but ya never know.

I bet half those idiots that are protesting wallstreet's "greed" over the last few days have an iphone, the pinnacle of greedy capitalism. oooh the irony.. lol

posted on 10 Oct 2011, 13:14 3

33. corporateJP (Posts: 2431; Member since: 28 Nov 2009)


"I bet half those idiots that are protesting wallstreet's "greed" over the last few days have an iphone, the pinnacle of greedy capitalism. oooh the irony"

+1 to this.

posted on 11 Oct 2011, 11:29

72. ZayZay (Posts: 571; Member since: 26 Feb 2011)


Wait you +1'd yourself this for this comment?????

Abusing the trend I see.

posted on 10 Oct 2011, 13:24 1

36. Juice (unregistered)


"I bet half those idiots that are protesting wallstreet's "greed" over the last few days have an iphone, the pinnacle of greedy capitalism. oooh the irony.. lol"

+1

posted on 10 Oct 2011, 17:19 1

47. ardent1 (Posts: 2000; Member since: 16 Apr 2011)


Daniel P.:

Gross margin is simply the difference between the sale price and the cost of material, direct expenses, and direct labor. R&D or S,G,& A (like marketing, etc) expenses are AFTER Gross Profit and before OPERATING MARGINS.

Also keep in mind the retail price IS NOT the price that Apple sells to the carrier. In a related Sprint article where Sprint will spend about $20 billion for about 30 million iphones, Apple cut a deal where the average price is north of $600 a device.

To calculate Apple's gross margin, you would use the $600 bogey. I hope you find this information helpful.

posted on 10 Oct 2011, 19:35 2

54. remixfa (Posts: 14255; Member since: 19 Dec 2008)


no.. ardent.. they are not.

like normal, you are incorrect and judgemental

the gross margin aka the gross profit margin is =

= total revenue - total cost of goods sold
__________________________________
..... total revenue.

The "cost of goods" is ALL the imbedded costs of manufacturing, labor, supplies, R&D, utilities, ect.. per unit multiplied by units sold. The more items you sell, the lower the imbedded costs get as they are differed over more units.

Also, the sprint RUMORS were proven to be just a RUMOR. There was never any facts to prove what Sprint may or may not have paid for the iphone to get on sprint. More than likely they paid next to nothing or at least no more than VZW/ATT did to get them on their network.


While the full retail value of the phone is not what the companies are paying for it, with apple its very very close in % as Apple controls the full retail sale price of the phones wherever they are, so its a decently reliable value.


http://www.investopedia.com/terms/g/grossmargin.asp#axzz1aQdBMUqk

posted on 10 Oct 2011, 21:28 3

56. ardent1 (Posts: 2000; Member since: 16 Apr 2011)


remixfa, you are such the villiage idiot and that post again shows why you are so f*cking stupid!!.

Apple is a publicly traded company and must comply with Regulation SX
http://en.wikipedia.org/wiki/Regulation_S-X

Per Reg SX, it gives the accounting decision making to FASB (the financial accounting standards board)http://www.fasb.org/home

And if remixfa had learn HOW TO READ besides being so f*cking stupid, then he should have come across the following:
http://www.investopedia.com/terms/g/gross_profit_margin.asp#axzz1aR3DbrIg

and read about COGS:
http://www.investopedia.com/terms/c/cogs.asp#axzz1aR3DbrIg

COGS EXCLUDES certain expenses: "....excludes indirect expenses such as distribution costs and sales force costs." That means COGS also excludes R&D.

The Sprint was just an example of discerning the average sale's price to come up with the correct REVENUES bogey.

remixfa, the villiage idiot once again shows why he deserves to be call the villiage idiot. Now, kindly STFU!!!

Man, you are just so dense it's unbelieveable!!

posted on 10 Oct 2011, 22:51 2

57. remixfa (Posts: 14255; Member since: 19 Dec 2008)


wow, really???

lol, i love when you attack me, because you prove yourself wrong with your own statements..

"COGS EXCLUDES certain expenses: "....excludes indirect expenses such as distribution costs and sales force costs." That means COGS also excludes R&D. "

NO IT DOESNT, you frikkin dense moron. SALES and R&D ARE 2 SEPERATE THINGS. sales.. aka sales people DO NOT research and develop products... lolololol


Sales are paid for by retail mark up at the store/direct/indirect level... AKA, the WHOLESALE/RETAIL cost to the STORE. Wholesale/Retail + Mark up is what the consumer.. aka You and I pay.


please.. keep it up.. your a riot. :)

posted on 11 Oct 2011, 01:13 3

62. ardent1 (Posts: 2000; Member since: 16 Apr 2011)


Let’s get something straight! Calling someone (like remixfa) who does stupid things STUPID, is not “attacking”, but a statement of fact. Call someone (again, like remixfa) who acts like “the village idiot” the VILLAGE IDIOT of phonearena.com is also not an attack, but a statement of fact. In addition to being the village idiot, remixfa is now acting as a petty and sore loser.

Remixfa:
Did you read Reg SX? -- Obviously not!
Did you read the FASB pronouncements? -- Obviously not!
Do you understand US GAAP? -- Obviously not.

Under US GAAP, direct expenses are captured by the gross profit margin and indirect expenses are captured by the operating profit magin. Indirect expenses are typically SG & A expense, R&D expense, indirect depreciation expense, etc. SG&A and R&D are BOTH example of indirect expenses that is obviously too difficult for remixfa, the village idiot of phonearena.com to understand.
Again, the quote from investopedia.com uses the phrase “such as” in “…excludes indirect expenses SUCH AS distribution costs and sales force costs.” Here is what investopedia.com has to say about R&D expense – they are operating expenses!! “What Does Research And Development (R&D) Expenses Mean? Any expenses associated with the research and development of a company's goods or services. R&D expenses are a type of operating expense that can be deducted as such on the business tax return. This type of expense is incurred in the process of finding and creating new products or services.” (source:http://www.investopedia.com/terms/r/research-and-development-expenses.asp#ixzz1aRznHIos )

The final proof that remixfa is indeed the villiage idiot is to look at Apple’s SEC filings:http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?FilingID=8049595-4408-8849&type=sect&dcn=0001193125-11-192493 Guess what – R&D and SG&A expenses are both under OPERATING EXPENSE. Who would have f*cking guessed!!

The “riot” is how remixfa continues to talk out of his ass.

posted on 11 Oct 2011, 06:45 2

63. remixfa (Posts: 14255; Member since: 19 Dec 2008)


you still dont get it, so please keep talking. this is fun. :)

keep calling me names, like EVERY OTHER time you have gone and made it some personal war against me, you are wrong and too stupid to notice.

so pleeeeeeeeeeeeeeease keep it up. :)

posted on 11 Oct 2011, 06:46 2

64. remixfa (Posts: 14255; Member since: 19 Dec 2008)


and i notice you still thumb yourself up every time.. lol.
i guess someone has to pat you on the back for your stupidity.

posted on 11 Oct 2011, 14:01

75. ardent1 (Posts: 2000; Member since: 16 Apr 2011)


Pointing out remixfa is the village idiot is making a statement of fact. You come out in an attempt to catch me making a mistake when in fact, you continue to talk out of your ass. You didn't read or understand what that website stated about operating expenses. You don't understand US GAAP. You didn't bother to look at Apple's SEC filings. Despite all these overwhelming facts, remixfa believes he can do no wrong. What an village idiot!!

And AS USUAL remixfa doesn't realize lots of people are giving me the green thumbs up in support. I can give myself a green thumb, but I can't give myself multiple green thumbs and this point is beyond remixfa's comprehension.

posted on 11 Oct 2011, 13:20

74. bobparker (unregistered)


your parents must be so proud. The amount of energy you two put into being such complete tossers is amazing

posted on 10 Oct 2011, 09:16

3. dha_george (Posts: 54; Member since: 27 Jan 2010)


$390,000,000 roughly apples day one profits based on phonearenas facts in this article

posted on 10 Oct 2011, 09:18 6

4. DROIDX0430 (Posts: 468; Member since: 24 Nov 2010)


479.00 profit on every phone sold...you gotta give it to apple...you throw the crowd a bone and they all go for it..no matter if it is still the same phone released i)a year and a half ago. Same size..same look. Used ipad 2 chip. Added siri with no lte. No wimax. No hspa for att...

posted on 10 Oct 2011, 10:24 3

12. clevername (Posts: 1436; Member since: 11 Jul 2008)


Im assuming you mistyped here, you said "no hspa for att..." even the iPhone 3g, 3gs, and 4 all had hspa. You may have meant hspa+. Which technically mo it doesn't achieve 21mbs but tmo and att call 14.4 mbs hspa+. And regardless of whether or not we consider that to be true the ITU seeks to be giving in to carriers faster than a hooker with low self-esteem. So the ITU is sating it might as well be 4g too. So even tho apple was careful and deliberately didn't call it 4G, att is.

posted on 10 Oct 2011, 19:36 1

55. remixfa (Posts: 14255; Member since: 19 Dec 2008)


clever, they did not

they use HDSPA. The iphone4s does not use HSPA+ either, it uses dual HSDPA/HSPA. There is a difference.

posted on 11 Oct 2011, 09:53

69. corps1089 (Posts: 492; Member since: 20 Jan 2010)


Technically correct: the best kind of correct!

posted on 10 Oct 2011, 16:48

44. E.N. (Posts: 2610; Member since: 25 Jan 2009)


"Proving once again that its incremental annual upgrade strategy still works flawlessly"

There goes Apple stealing ideas from Android again. Google should sue.

posted on 10 Oct 2011, 09:21 5

5. DROIDX0430 (Posts: 468; Member since: 24 Nov 2010)


649.00 msrp. Phone worth 170.00. 479 dollar profit. Same phone vice a few tweeks here and there. Priceless. I guess the fans will distinguish themselves with other iphone users is....do you have the s..

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