Apple profits through iPhone

June 26th, 2008 - 8:32 pm ICT by Amrit Rashmisrisethi  

iPhone will be more profitable than any other product in its popular iPod line of music players, despite of its price range.

The new iPhone are expected to exceed the 50 percent level achieved by Apple’s most popular media players.

“Apple’s iPod and iPhone products typically are priced about 50 percent more than their (materials and manufacturing) costs,” iSuppli said. ”

Wireless phone carriers are expected pay a subsidy of about $300 to Apple for each of the new iPhones, iSupply said.

ISupply estimates manufacturing costs for Apple’s new high-speed iPhone totaled $173, compared with $265 for the original iPhone, released a year ago for about $500 with no subsidy.

“At $173, the new iPhone is less expensive to produce than the first-generation product, despite major improvements in the product’s functionality and unique usability, due to the addition of 3G communications,” said Dr. Jagdish Rebello, principal analyst for iSuppli.

The figures don’t include other costs, including software development, shipping and distribution, and packaging, iSuppli said.

Once the 3G iPhone becomes available, iSuppli plans to perform an actual, detailed teardown of the new iPhone’s components and cost structure.

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