iPhone rakes in 55.6 percent profit margin

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iPhone rakes in 55.6 percent profit margin

US$599 iPhone brings company US$333.17 in profits.

Apple is making US$333.17 in profit on each 8GB iPhone that it sells, according to an analysis by iSupply.

In a 'teardown report' the firm determined that the added costs of the device's components came in at US$265.83. The 4GB model costs US$24 less to manufacture, but retails at US$100 below the price of the US$599 8GB model.

The cost figure represents the so-called bill of materials and doesn't account for development, distribution and marketing costs.

The flash memory module comes out as the most expensive component, costing US$48 for the 8GB model and US$24 for the 4GB one. Both are supplied by Samsung, which also supplies the phone's ARM RISC processor at an estimated US$14.25 each, as well as a US$14 1GB SDRAM memory module.

The touch screen module for the display ranks as the second most expensive component at US$27. It is manufactured by Balda of Germany and its Chinese partner TPK Holding. The display itself is supplied by multiple sources including Epson and Toshiba and costs US$24.50.

iSupply projects continued strong iPhone sales, with consumers snapping up 4.5m units this year and reaching more than 30m by 2011.

The iPhone's profit margins are similar to the ones that Apple makes on its iPod media players. But not all of the company's products are this profitable.

iSupply has previously pegged the Apple TV at a www.vnunet.com, prompting the firm to believe that Apple putting the expansion of its market share in favour of profitability there.
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