Most of the people reading this article will surely have owned the iPhone or at least planning to won one very soon. But you have no idea as how much the Apple company makes on each iPhone, and we are sure that you will be shocked to know that. Apple did not reach the US Dollars one trillion mark by doing charity. In fact, this company is one of the most profit making companies in the world at the moment, and its maximum business comes from selling iPhones.
The iPhone has created such a huge craze in the marketplace that people wait for the next new iPhone every year, and they are ready to pay even the huge price tag of $1000 plus for it. Do you have any idea how much these devices cost Apple? And what business margin Apple has behind each device sold in the market? You will be shocked. Let’s take a look at the business strategy of Apple.
Apple Inc started from a garage and has now become a whopping three trillion worth company today. There is no doubt that this has been possible due to its huge fan following and brand loyalty. An Apple user seldom switches to another brand in his lifetime and that makes Apple the undisputed market leader in the electronic segment.
Now let us come back to the main topic of how much money Apple makes on each of its iPhones. According to Reuters, TechInsights – an Ottawa and Ontario based firm which rips open phones to analyse their contents and estimate the cost of the parts inside – said on Tuesday that the iPhone Xs Max with 256 gigabytes of storage capacity contains about $443 in parts and assembly costs, compared to $395.44 for the 64-gigabyte version of last year’s iPhone X.
According to them the Apple’s latest Xs Max priced at $1249 in the US market actually costs only $443 for making that means there is a 300 percent margin! In its cost analysis released yesterday, TechInsights found that the single priciest part in the iPhone Xs Max – the display – cost $80.50, (that makes it Rs. 5600/- at today’s forex value) compared with $77.27 for last year’s iPhone X, which featured a smaller 5.8-inch screen.
According to sources, other costs that increased the overall value were the phone’s processor and modem chips, primarily because the chips used newer chip-making techniques from Intel (INTC.O) and Taiwan Semiconductor Manufacturing Co Ltd (5425.TWO) to boost their performance while taking up the same space.
Yet, most people flock to purchase an iPhone. It has created such a lasting brand value, and also customer care.
Source: Daily Mail