"iSupply (sic) claims that an iPhone costs just $265.83 to make, yielding a 55% margins over parts costs for Apple."
I wish research companies pay attention to their wording. Its figure shows 55% margins over parts costs. So, how can an iPhone costs just $265.83 to make? Do the parts ship themselves to the factory and assemble itself magically? Simply say that an iPhone contains $265.83 worth of parts or cite the actual figure to make one iPhone.
I agree with wallace. It seems they do that to sensationalize their findings and cast a negative light on Apple.
True but you can't argue with an almost 5% jump in stock price today. Seems to me that a significant number of investors move when there are numbers behind things, even estimates based on raw research. Add half a million units sold to a fuzzy margin figure and people start seeing Apple's stock price as a deal.
Apple is milking nicely the dumbass Maczealots LOL
Or, Kula, they are making money hand over fist off of people who love cutting edge technology or who have been hating their cellphone interface and waiting for a product like the iPhone. Just because you don't like Apple or their products doesn't mean that over 500,000 people who do enjoy Apple and their products are idiots. Microsoft and others have had ample opportunity to reinvent the cellphone for years while Apple focused on other markets. Who are the real idiots here?
Douglas Cootey
☆ The Splintered Mind
For me, I'll be waiting for iPhone ver. 2.0/3.0. That'll be about the time my Verizon Wireless contract will be over. I like Verizon but I don't think I'll wait 5 years to get an iPhone. Anyone know a website that tracks number of switchers to AT&T? The more nervous Verizon gets the more competitive they become. Can only help me.
Investors understand those iSuppli numbers are just recurring costs, and the larger the margin, the better, because it means Apple can still make a good profit after R&D and S&GA costs are taken out.
The general public reads those headlines and think that Apple is gouging them, but Apple is just setting prices according to what they think people are willing to pay.
Thanks for distiguishing between parts cost and margin. As you noted, you have to subtract more than the parts cost to get true margin, but those other costs of distribution, assembly, promotion, and the like are much harder to measure. So the analysts talk about what they can measure than what they can't.
Glad to hear someone else is thinking about what the numbers actually mean.
Carl
Commenting by HaloScan
