With the release of iPhone 3G, “not only will the iPhone be a growth story for Apple, but it could also be a huge margins story,” Market Folly writes or SeekingAlpha.
“Portelligent released research stating that it thinks that the new iPhone will cost as little as $100 to produce, when the first generation iPhone cost around $170 to produce,” Market Folly writes.
“However, even if that figure is only slightly off, the point is that AAPL will still be seeing huge margins, and here’s why. AAPL is Billy Badass when it comes to component pricing… AAPL will be paying much less for components this time around due to technological/engineering advancements and the bullying approach they take in the component space. The display will most likely cost them half as much this time around. Additionally, AAPL will be getting memory for the phone on the cheap and in turn can sell it to consumers for nearly five times as much as it got it for. The point is that AAPL has significantly reduced its input costs this time around; even with more/newer components in the phone,” Market Folly writes.
“I don’t think most people realize is the huge margins AAPL will be seeing with this product,” Market Folly writes.
More in the full article here.
[Thanks to MacDailyNews Reader “Carl H.” for the heads up.]
Raw component cost tallies are interesting, but they tell only a portion of the total cost of the product. Apple’s R&D and marketing costs, to mention just two areas, are significant contributors to the real total cost of the product.