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