Report: iPhone margins are nearly 60%

brainstormtech.blogs.fortune.cnn.com

6 pointsTomOfTTB2 comments

The irony (for me) was that I was just having this discussion with someone on HN. In it I was almost sure Apple made more net profit off iTunes because hardware margins have been so historically low. I didn't see how a company could make more off a hardware device than they did off say...software apps.

I guess the answer to that "how" question is to "be Apple" because apparently they're getting the same level of premiums they used to get off of Macs on the iPhone now. No wonder they've shifted their resources to this (and are willing to make blatant attempts to kill of the Pre even though it isn't really that much of a threat)

The consumer cost of an iphone is not based on 'cost+' as it is in the rest of the phone segment, it's based on 'cool' and that is not directly related to cost. So they manage to do something that most people can only dream of, to disconnect the real cost of your offering from the value perceived by the buyer.

That's pretty much the only way to make a killing, everything else will end up somewhere between 0 and 30% margin.

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