Apple: iPhone 6 profit margin a rip-off 69%

The iPhone 6 costs Apple between $200 and $247 to build, giving the company a profit margin of 69% for the entry-level model, according to a teardown analysis.

The teardown, executed by research firm IHS and shared with Re/code, is based on an analysis of the parts used in each model and an estimate of the labor involved ($4 to $4.50 for each device.)

IHS found the costs range from $200 to $247 for iPhone 6 models that sell for $649 and $849 without a contract. The more expensive models sport 128 GB of storage space, netting Apple a slightly higher margin.

Costs for the iPhone 6 Plus run from $216 to $263 for models that sell for $749 and $949 without a contract. As Re/code reports, Apple has improved its profit margin for its phones. While the iPhone 5 and the iPhone 5S both provided the same margin of around 69%, the first iPhone in 2007 gave Apple a 55% margin.

The combined display and touchscreen take up much of the material cost. The iPhone 6’s screen costs Apple $45 and the iPhone 6 Plus’ screen costs $52.50, the analysis shows.

The analysis doesn’t take into account other costs involved, including advertising, marketing and distribution.

In April, IHS reported that a Samsung Galaxy S5 with 32GB costs the company $251.52. That phone sells for $599, giving Samsung a margin of around 58%. The Moto X costs $226.

While a margin of 69% is very healthy, a pair of $300 Beats headphones from Apple cost anywhere from $14 to $40 to produce, generating a margin ranging from 87% to 95% for the company.

Apple iPhone 6

Apple iPhone 6

Source: http://mashable.com/2014/09/23/teardown-iphone-6-costs-200/

Source Article from http://www.hangthebankers.com/apple-iphone-6-profit-margin-a-rip-off-69/

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