Apple's iPhone appears to be a big money maker for the company - and looks like it will continue being one for years to come.
July 4, 2007 (Press Release) --
For every dollar consumers are spending on Apple's high-end iPhone, the company is making a cool 55 cents after factoring in supply and manufacturing costs, industry research firm iSuppli reported today.
Meanwhile, the El Segundo-based firm estimated that Apple would ship 4.5 million iPhones this year and 13.5 million next year. The latter estimate is above Apple's own internal targets.
Apple is charging $599 for the 8-gigabyte version of its new handset, which hit store shelves on Friday. But its total cost to make the device is $265.83, according to iSuppli.
Unlike many of its computer and consumer electronics competitors, Apple has long been able to post high profit margins on its products, in part by charging a premium for them. But the company's profit on the iPhone appears to top its other product lines. In the first six months of Apple's current fiscal year, the company posted a gross profit - essentially the difference between the total sales it generated from its products and services and its costs of producing and providing them - of 33 percent.
Should the company be able to maintain those margins, it could have a cash cow for years to come in the iPhone, according to iSuppli's projections. iSuppli expects Apple to ship some 30 million iPhones in 2011.
CEO Steve Jobs predicted in January that Apple would sell 10 million iPhones next year. Analysts have estimated that the company already sold a half million or more iPhones this past weekend.
The iPhone is Apple's first entry into the cell phone market. In addition to making voice calls, the device, which replaces physical keys with a touch-screen interface, can surf the Web, check e-mail and play music and videos with its built-in iPod media player.
The leading supplier of iPhone parts is Samsung, according to the report. Some $76.25 worth of each iPhone's cost is due to Samsung parts, including the device's flash memory, its SDRAM memory module and its application processor, according to iSuppli.
The iPhone's antenna that allows it to access AT&T's network is provided by Infineon, which also provided some power management devices. The gadget's signature touch screen was provided by Epson, Sharp and Toshiba Matsushita Display Technology at a total cost of $24.50 per iPhone.
But local companies are in on the action too. National Semiconductor and Marvell Technology are both providing chips for the iPhone. National is providing a processor that connects the iPhone's display to its graphics controller, while Marvell is supplying the iPhone's WiFi chip.
Apple's stock rose following the report. In recent trading, the company's shares were up $5.91, or 4.9 percent, to $127.17.
Meanwhile, the El Segundo-based firm estimated that Apple would ship 4.5 million iPhones this year and 13.5 million next year. The latter estimate is above Apple's own internal targets.
Apple is charging $599 for the 8-gigabyte version of its new handset, which hit store shelves on Friday. But its total cost to make the device is $265.83, according to iSuppli.
Unlike many of its computer and consumer electronics competitors, Apple has long been able to post high profit margins on its products, in part by charging a premium for them. But the company's profit on the iPhone appears to top its other product lines. In the first six months of Apple's current fiscal year, the company posted a gross profit - essentially the difference between the total sales it generated from its products and services and its costs of producing and providing them - of 33 percent.
Should the company be able to maintain those margins, it could have a cash cow for years to come in the iPhone, according to iSuppli's projections. iSuppli expects Apple to ship some 30 million iPhones in 2011.
CEO Steve Jobs predicted in January that Apple would sell 10 million iPhones next year. Analysts have estimated that the company already sold a half million or more iPhones this past weekend.
The iPhone is Apple's first entry into the cell phone market. In addition to making voice calls, the device, which replaces physical keys with a touch-screen interface, can surf the Web, check e-mail and play music and videos with its built-in iPod media player.
The leading supplier of iPhone parts is Samsung, according to the report. Some $76.25 worth of each iPhone's cost is due to Samsung parts, including the device's flash memory, its SDRAM memory module and its application processor, according to iSuppli.
The iPhone's antenna that allows it to access AT&T's network is provided by Infineon, which also provided some power management devices. The gadget's signature touch screen was provided by Epson, Sharp and Toshiba Matsushita Display Technology at a total cost of $24.50 per iPhone.
But local companies are in on the action too. National Semiconductor and Marvell Technology are both providing chips for the iPhone. National is providing a processor that connects the iPhone's display to its graphics controller, while Marvell is supplying the iPhone's WiFi chip.
Apple's stock rose following the report. In recent trading, the company's shares were up $5.91, or 4.9 percent, to $127.17.
Email
Print
Download
SPAM
LEAVE A COMMENT
