Apple to get a 50% margin on the iPhone?


— 12:28 PM on January 18, 2007

Heads turned when Apple announced its iPhone last week, but many criticized the device's hefty price tag of $499 (and $599 for the 8GB model.) One might imagine that those high prices are an unfortunate side-effect of the iPhone's expansive feature set, but a report by research firm iSuppli suggests otherwise. As EE Times reports, iSuppli says the cost of manufacturing a 4GB iPhone is a scant $230, which would suggest that Apple and Cingular will enjoy a gross margin of around 50% on each device sold. The most expensive component in the device is the touch-screen, iSuppli says, and it only costs $33.50.

Those figures are still preliminary estimates, but the research firm says it is "pretty confident" of its predictions. Besides, a near-50% margin wouldn't be unusual for Apple: products like the iMac and iPod nano already fetch >45% margins, according to EE Times.

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