Apple Earns 61% Gross Profit Margin On Each iPhone 4 Sale!

It costs Apple $171 on building a 16 GB iPhone 4 – stated by a wall street analyst. This is the amount which Apple spends on generating an iPhone 4, i.e. the cost of materials and tangibles used to build an iPhone 4. Apart from this cost, an additional $35 cost Apple bear for non-hardware things, such as claims, licensing etc. It brings total cost to $206. For 32 GB iPhone 4, it costs Apple $230 – $195 hardware cost and 35 non-hardware cost.

These facts and figures, however do not include all other costs which Apple bear, e.g. cost of research and development, marketing cost, labor cost etc.

All of us might not be familiar with the subsidies which mobile careers pay to Apple. As Apple sells 16 GB iPhone 4 for only $199 and 32 GB iPhone 4 for only $299. These figures do not show the actual amount which Apple receives on each iPhone 4, no matter 16 GB, or 32 GB. Analysts however states that including the subsidies and all other amounts which Apple receives on each 16 GB iPhone 4 goes to $529 and for 32 GB iPhone 4 it goes to $629!

Now if we calculate the profit margin, it is earning 61% gross profit margin approximately on 16 GB iPhone 4, and 32 GB iPhone 4 is giving Apple a lucre gross margin of 70%. Good enough for Apple to do research and development for the next iPhone.