In news on the sidelines, we talked about the IHS report, which examined the iPhone 8 Plus and analyzed the cost of every part of it, and announced that the phone costs $ 288 and added $ 7 to the installation cost, and this brings its price to $ 295, while it is sold at $ 799, i.e. a net 171%. Social media reported the news and talked about Apple's exaggeration in the prices of its devices. In this article, we are talking together: Does the iPhone really cost $ 295 or a number close to this?

Is Apple Really Selling An iPhone For Double Its Cost?

I know the answer seems intuitive to most users and that there are other costs like research. Yes, this is true, but we will strive together to identify the other costs, but how much are these costs approximately? Of course it must be remembered that no one can know the exact true cost of an iPhone. But let's get to know the iPhone and Apple in more detail from the reality of Apple's financial statements during the first 9 months of its fiscal year:

◉ Apple's total sales are $ 176.6 billion.

Apple sold 170 million iPhones.

◉ Apple's revenue from iPhone sales is estimated at $ 112 billion.

Thus, we find that the iPhone represents approximately two-thirds of Apple's income, so it makes sense if we want to make calculations that it is responsible for financing two-thirds of anything that Apple spends. These are the most important items of Apple's spending in the same 9 months:

Apple spent $ 108.4 billion under the rubric of "selling expenses," which include stores, manufacturing costs, and others.

Apple spent $ 8.584 billion in research and development.

Apple spent $ 11.447 billion in administrative, general and operating expenses.

Apple paid $ 12.5 billion in taxes

That is, the total items spent by Apple are equal to 141 billion dollars, and this becomes Apple's net profit estimated at 37.6 billion dollars (1.9 billion other profits were added)

As we mentioned, the iPhone is responsible for two-thirds of Apple, or nearly 64%, and the distribution of the previous figures shows the following

IPhone's share of profits is equal to $ 24.1 billion

◉ Apple's net profit from one iPhone is only $ 215.

If we consider that the iPhone costs approximately $ 300 "average" and the average selling price of the iPhone is $ 765, but Apple earns only $ 215, this means that the iPhone costs $ 250 as an average other expenses.

The iPhone costs $ 300 pieces + $ 250 other expenses and is sold at an average of $ 765, meaning only 39% profit margin.

Important clarification

The mentioned in this article is an approximate calculation based on "averages" and is not accurate, of course, as we assume constant cost and equal distribution. Only Apple knows the exact figures, but we can say that these calculations are close to reality, as we estimated the profit margin at 39%, and Apple explains that in general, the average net profit is 37.5-38%, but of course there are Apple products that profit more than other products. Apple's profit margin from the iPad was more than the iPhone. And the iPod Touch Apple was earning more from it.

Did you imagine that Apple spends tens of billions every month in various expenses? Do you have the experience in the calculations to assess that our estimate is close to reality or not?

Source:

apple

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