Jay Rose Posted January 30, 2012 Report Share Posted January 30, 2012 there are reports on the net that Apple makes a 75% profit per iPhone: That could be, Marc; if so, I stand corrected. However... this is directly from the link you posted: Thanks to numerous Asian-based suppliers and Apple’s tight control, the iPhone 4S should cost just $170-$220 to make, according to Deutsche Bank analyst Chris Whitmore. Carrier subscribers will pay anywhere from $199 to $849 for the iPhone 4S, depending on its memory configuration. Even worst case - that somebody, somewhere is paying $850 for a phone that cost Apple about one-quarter to manufacture - what makes you think that's Apple's profit? There are a long line of people with their hands out before a product gets to the consumer: it has to be packaged and shipped halfway across the world, cover the jobber's and retailer's costs (including advertising, paying us to make commercials and other people to run them), make profits for everybody concerned, and still be able to be sold by someone else for $199 after cell company's rebates. In fact, your article just says 75% is "according to one [unidentified] analyst". Not the guy quoted, and not backed up by anything other than the writer's claim of an $850 sale price. I just checked Amazon, and it looks like those 8 GB phones Whitmore analyzed are selling for about $500 without requiring a 2-year cell contract. Okay, so maybe it's only 40% profit? Not quite... we're still comparing manufacturing cost, FOB China, with the final price to the consumer in the US. And that's just manufacturing: Whitmore isn't looking at Apple's considerable cost to design the thing, test it, develop the software, and everything else they risked before unit #1 was sold. -- My guesses on Apple's profit might have been low. I based them on my knowledge of other consumer electronic products, and Apple certainly gets economies of scale. I think yours are a bit high. Quote Link to comment Share on other sites More sharing options...
Marc Wielage Posted January 30, 2012 Report Share Posted January 30, 2012 My guesses on Apple's profit might have been low. I based them on my knowledge of other consumer electronic products, and Apple certainly gets economies of scale. I think yours are a bit high. It's fair to say that, because it's all conjecture. None of us really know what their real profits are on their products. The recent book Inside Apple: How America's Most Admired--and Secretive--Company Really Works goes into this in quite a bit of detail. But it's no secret that their stock price just hit the highest in history last week, and they have $400 billion in cash in the bank. My gut feeling is that they're not making that much on the phones, but they could do what I suggeted: make a little less profit, drop their prices, and build more of their stuff and hire more Americans. The end result might actually up their sales quite a bit. Quote Link to comment Share on other sites More sharing options...
Laurence Posted January 30, 2012 Report Share Posted January 30, 2012 Apple's profit is not a big mystery. $6.6 billion dollars of profit on $28.2 billion revenue. That's just for the latest 3-month period. Those numbers are so large that if they spent $800 million each year on improved manufacturing conditions, the $6.6 billion profit would come crashing down to a mere $6.4 billion. Quote Link to comment Share on other sites More sharing options...
Rob Beal Posted January 30, 2012 Report Share Posted January 30, 2012 Also, the actual iPhone is just a piece of hardware, don't forget about all the profits they make on all the digital stuff you buy AFTER buying the phone (apps, music, tv/movies, etc). They could probably eliminate all the profits from the actual phone sales and still be very profitable as a company. Quote Link to comment Share on other sites More sharing options...
Marc Wielage Posted January 31, 2012 Report Share Posted January 31, 2012 Apple's profit is not a big mystery. $6.6 billion dollars of profit on $28.2 billion revenue. I mean per product and per division. Other pundits have said that, when the phone dips below a certain price, Apple could literally afford to give it away, just due to kickbacks from the AT&T and Verizon contracts. I think the 3GS is already free right now (or close to it). Quote Link to comment Share on other sites More sharing options...
Olle Sjostrom Posted January 31, 2012 Report Share Posted January 31, 2012 I mean per product and per division. Other pundits have said that, when the phone dips below a certain price, Apple could literally afford to give it away, just due to kickbacks from the AT&T and Verizon contracts. I think the 3GS is already free right now (or close to it). It is, on a contract. And they make (huge?) profits on the apps as well Quote Link to comment Share on other sites More sharing options...
OmahaAudio Posted February 7, 2012 Report Share Posted February 7, 2012 "Don't start saying corporations are people too!" A wise man recently said, "I'll believe that corporations are people as soon as the State of Texas executes one." Quote Link to comment Share on other sites More sharing options...
Eric Berzins Posted March 4, 2012 Report Share Posted March 4, 2012 If Apple manufactured in the US they wouldn't have become the behemoth they have, their bottom line relies on them producing cheaply. I really don't want to hear about Apple's 'bottom line' as an excuse for anything. "Apple now has $97.6 billion cash on hand" http://www.huffingto..._n_1229529.html With that much cash sitting around I'm sure they could afford to pay for their entire workforce to live in Manhattan if they wanted to. Quote Link to comment Share on other sites More sharing options...
Marc Wielage Posted March 4, 2012 Report Share Posted March 4, 2012 And... their market cap just hit half a trillion dollars. Stock price now hovering around $500 per share. Makes you wish all of us had bought a few shares when it was $7.70 in late 1998. There are already stock market pundits wondering if Apple could conceivably someday be the very first corporation, worldwide, worth One TRILLION Dollars. Quote Link to comment Share on other sites More sharing options...
taylormadeaudio Posted March 6, 2012 Report Share Posted March 6, 2012 Thanks Marc, That totally made me laugh! ~tt Quote Link to comment Share on other sites More sharing options...
OmahaAudio Posted March 7, 2012 Report Share Posted March 7, 2012 "Makes you wish all of us had bought a few shares when it was $7.70 in late 1998." How's this for totally freakin' depressing? What if I had bought Apple stock instead?: http://kyleconroy.com/2010/04/apple-stock Quote Link to comment Share on other sites More sharing options...
johnpaul215 Posted March 7, 2012 Report Share Posted March 7, 2012 I wonder how much of that cash on hand rotates though. One reason Apple is ahead of the competition is, for example, they will buy all the newest super high resolution screens (for iPads or iPhones) with cash in advance. Same goes for any cutting edge components. That's worth a lot more than "we think this new blablabla will be very popular and down the road will buy a lot of components from you". As for made in USA, Macs used to be (my G4 tower was built in CA). When Steve Jobs returned to Apple in 1996, the company was on the ropes and fast heading to bankruptcy. Everyone else was using places like Foxconn, and the #1 complaint against Apple was price of their computers. Hopefully with enough pressure, Apple will bring some manufacturing back, but who knows. If nothing else, it might better the conditions for workers in China. That story about Steve Jobs explaining to Obama why they have to make iPhones in China is interesting. How do you compete against a company that can rally 3,000 workers at the drop of a hat that will work to the precision required to assemble iPhones? It also helps that most of the component manufacturers are all in the same town, and where there is an issue, they jump to fix it. I know it's Japan, and not China, but the NUMMI episode of This American Life is a downright depressing look at US manufacturing. My father was an old school engineer and owned a small manufacturing plant and machine shop. I saw first hand how he operated in the old world "design it right, build it once to last forever". When I was studying mechanical engineering in the 1990s (same school as my father), in my first term I was taught the phrase "planned obsolescence". When you know you are building a product that is going to be replaced, or by it breaking down you are "creating jobs for america"... then it's no surprise that workers here don't give a crap. Yes they explained that things like bridges need to last, but not air conditioners..... ugh. http://www.thisamericanlife.org/radio-archives/episode/403/nummi Quote Link to comment Share on other sites More sharing options...
johnpaul215 Posted March 7, 2012 Report Share Posted March 7, 2012 p.s. I bought some AAPL in 2000 or 2001 for something like $35 and it split twice before I sold it off. I didn't have much, and actually sold the last of it to buy my Fusion 10. I wish I didn't sell it, but the Fusion was a much better investment than the car I used the rest of the stock to buy. Quote Link to comment Share on other sites More sharing options...
benr Posted March 7, 2012 Report Share Posted March 7, 2012 I like em quite a bit right now... ....as I click the pre-order button for the iPad 3! Quote Link to comment Share on other sites More sharing options...
al mcguire Posted March 27, 2012 Report Share Posted March 27, 2012 QUOTED “Things came out of my mouth that just weren’t true, and over time, I couldn’t even hear the difference myself.” — Mike Daisey, in an apology posted on his blog. The performance artist, creator of the popular one-man theater piece “The Agony and Ecstasy of Steve Jobs,” was found to have lied about details of his visit to Chinese factories where Apple and other tech products are made. (See The Daisey drama: The (tarnished) show goes on, but so does scrutiny of labor conditions.) Among those to which Daisey apologizes: his colleagues in the theater, journalists and human-rights advocates. http://blogs.silicon...sey-says-sorry/ Quote Link to comment Share on other sites More sharing options...
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