As first reported by Businessweek, iSuppli's teardown of the iPhone 4 found that the components inside cost an estimated $187.51.
The UK handset price is £499 so without tax is £425, which is $641.
So they would stand to make over $400 per handset - probably over $1 billion this week alone. It's not surprising really given that in 3 years they make the most revenue out of any mobile phone company.
There are obviously other costs like R&D and Steve's dry cleaning bill to get the same outfit ready every day but there's still a lot of profit at that price point.
Imagine how many they'd sell if they only took $100-200 per handset.
If they can't handle the demand right now, it would be anarchy if they dropped the price that much.
The UK handset price is £499 so without tax is £425, which is $641.
So they would stand to make over $400 per handset - probably over $1 billion this week alone. It's not surprising really given that in 3 years they make the most revenue out of any mobile phone company.
There are obviously other costs like R&D and Steve's dry cleaning bill to get the same outfit ready every day but there's still a lot of profit at that price point.
Imagine how many they'd sell if they only took $100-200 per handset.
If they can't handle the demand right now, it would be anarchy if they dropped the price that much.
That's exactly what I was thinking. The article compares the price of the phone against the "handset price" you pay up front on a contract, which is pointless because you carry on paying for the handset all the way through the contract.
The profits do look on the large side to me, but then when I go to my local phone shop I don't see Android units coming in much cheaper - if at all.
Such figures are very misleading since they completely ignore the costs of R&D, design, manufacturing, developing the software, shipping, retail expenses, customer support and so forth.
Someone has to do all these things and to leave them out of the equation is to miss the most important parts of the equation. Without these things all you have is a useless collection of electronic components.
Comments
As first reported by Businessweek, iSuppli's teardown of the iPhone 4 found that the components inside cost an estimated $187.51.
The UK handset price is £499 so without tax is £425, which is $641.
So they would stand to make over $400 per handset - probably over $1 billion this week alone. It's not surprising really given that in 3 years they make the most revenue out of any mobile phone company.
There are obviously other costs like R&D and Steve's dry cleaning bill to get the same outfit ready every day but there's still a lot of profit at that price point.
Imagine how many they'd sell if they only took $100-200 per handset.
If they can't handle the demand right now, it would be anarchy if they dropped the price that much.
The UK handset price is £499 so without tax is £425, which is $641.
So they would stand to make over $400 per handset - probably over $1 billion this week alone. It's not surprising really given that in 3 years they make the most revenue out of any mobile phone company.
There are obviously other costs like R&D and Steve's dry cleaning bill to get the same outfit ready every day but there's still a lot of profit at that price point.
Imagine how many they'd sell if they only took $100-200 per handset.
If they can't handle the demand right now, it would be anarchy if they dropped the price that much.
That's exactly what I was thinking. The article compares the price of the phone against the "handset price" you pay up front on a contract, which is pointless because you carry on paying for the handset all the way through the contract.
The profits do look on the large side to me, but then when I go to my local phone shop I don't see Android units coming in much cheaper - if at all.
Someone has to do all these things and to leave them out of the equation is to miss the most important parts of the equation. Without these things all you have is a useless collection of electronic components.