Apple iPhone expected to have a 50% margin for the company

Apple iPhone expected to have a 50% margin for the company

Apple showcased their iPhone mobile phone last week and is due to ship it in the market by June this year. The phone is going to sell for USD 499 and USD 599 for the 4GB and 8GB models.

Market research firm iSuppli has said in a report that the company at these prices would have around 50% profit margin on both the models.

The company said that as per their estimates the hardware Bill of Materials (BoM) for the 4GB version of the iPhone will be USD 229.85. Adding the extra costs of royalties and other stuff, the manufacturing cost of the phone comes to around USD 245.83. This phone would be sold in the market for a price of USD 499. This comes to around a 50.7 percent profit margin.

The more expensive model is expected to cost the company around $280.83 and with a price tag of USD 599; it would have roughly a 53.1 percent profit margin.

iSuppli Director and principal analyst Jagdish Rebello added: “With a 50 percent gross margin, Apple is setting itself up for aggressive price declines going forward.”

The mobile phone market is a lot more competitive compared to let’s say the digital music player market. It would be tougher for Apple to make its own place in this market.