EL SEGUNDO, Calif., Jan. 18 /PRNewswire/ -- Each Apple iPhone sold will
generate nearly a 50 percent gross margin for Apple Inc. and partner
Cingular Wireless, giving the companies a hefty profit, as well as plenty
of room for future price cuts, according to a preliminary functional Bill
of Materials (BoM) estimate created by iSuppli Corp.
"iSuppli estimates the 4Gbyte version of the Apple iPhone will carry a
$229.85 hardware BoM and manufacturing cost and a $245.83 total expense,
yielding a 49.3 percent margin on each unit sold at the $499 retail price,"
said Andrew Rassweiler, teardown services manager and senior analyst for
iSuppli. "Meanwhile, the 8GByte Apple iPhone will sport a $264.85 hardware
cost and a $280.83 total expense, amounting to a 46.9 percent margin at the
$599 retail price."
While iSuppli has a high degree of confidence in its conclusions, these
figures are considered preliminary until we perform an actual physical
teardown and analysis of the Apple iPhone. For Apple, such a strong
hardware profit is par for the course, with the company having achieved
margins of 45 percent and more in products including the iMac and iPod
nano, according to iSuppli. However, because Apple is facing extensive
competition in the music-phone market, the company may need to cut into its
margins to reduce pricing in the future.
"With a 50 percent gross margin, Apple is setting itself up for
aggressive price declines going forward," said Jagdish Rebello, PhD,
director and principal analyst with iSuppli.
iSuppli developed its preliminary functional BoM estimate based on an
analysis of the capacity and features of the Apple iPhone, combined with
information from materials from Apple, company sources and third-party
publications. To further help determine the content of the Apple iPhone,
iSuppli leveraged the extensive knowledge of its Teardown Analysis service.
iSuppli also employed data from its Mobile Handset Cost Model and
Design Forecast Tool. This estimate differs from iSuppli's typical teardown
analysis of electronic equipment. iSuppli's teardowns involve the actual
physical dissection of electronic equipment in order to make first-hand
observations of equipment content and design.
For a full version of this release, including figures illustrating
issues discussed in this release, please visit:
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Property of iSuppli Corporation
About iSuppli Corporation
iSuppli Corporation is the global leader in technology value chain
research and advisory services. iSuppli provides market intelligence
services for the EMS, OEM and supplier communities in addition to servicing
consumer electronics and media concerns. Services afforded by iSuppli range
from electronic component research to device-specific application market
forecasts, from teardown analysis to consumer electronics and from display
device and systems research to multimedia content and services. More
information is available at www.isuppli.com
SOURCE iSuppli Corporation