iPhone X smartphone costs $357.50 to make and sells for $999

[Warboy]

Quote

 

The iPhone X smartphone costs $357.50 to make and sells for $999, giving it a gross margin of 64 percent, according to TechInsights, a firm that tears down technology devices and analyzes the parts inside. The iPhone 8 sells for $699 and has a gross margin of 59 percent.

 

The finding is surprising because technology products tend to become more profitable as they age and the parts for them drop in cost.

 

The iPhone X is a brand new design that went on sale on Friday, to apparently strong demand, while the iPhone 8 is an update on last year’s iPhone 7, which itself was similar to the iPhone 6 released in 2014.

Apple declined to comment on TechInsights’ analysis.
 

Source - Reuters

That's extreme, nearly 3 times (2.8x) the cost to make the phone. Knowing Apple's tax loopholes, Foxconn workers, etc. At some point I don't care how advance the tech supposedly is, It's not worth it.
 

Quote

For Context,

 

Samsung S8 is $313.50 in parts, price is $724.99 (2.31x)

Apple Iphone 8 is $254.87 in parts, (starts at $699) (2.74x)

LG G5 is $256.50 in parts, price is $599.99 (2.33x)

Apple iPhone 7 is $224.80 in parts, price is $649 (2.74x)

Samsung Galaxy S7 is $255 in parts, price is $599 (2.34x)

So most manufacturers do a 2.34x markup.
 

 

[ARikozuM]

I find it funny that it's always Apple's margins that are talked about... What about Samsung? You know. The makers of F#$%ING EVERYTHING!

Spoiler

Furl your brows while you yell the CAPS.

They make tanks! And Note 7s C4 to blow them up with!

[Khris]

what about samsung products? isn't that how all electronics are anyways?

[SansVarnic]

Apple tax

Samsung Tax

Intel Tax

etc...

 

Pretty much sums that up. Its how it is, they make we are willing to buy it demand goes up price goes up. The way of the world, greed.

[vong]

6 minutes ago, Warboy said:

Source - Reuters

That's extreme, nearly 3 times (2.8x) the cost to make the phone. Knowing Apple's tax loopholes, Foxconn workers, etc. At some point I don't care how advance the tech supposedly is, It's not worth it.

I see you don't know how companies work. They gotta make a profit to pay for workers, advertising, shipping and a bunch of other things.

[Warboy]

3 minutes ago, ARikozuM said:

I find it funny that it's always Apple's margins that are talked about... What about Samsung? You know. The makers of F#$%ING EVERYTHING!

 

They make tanks! And Note 7s C4 to blow them up with!

 

2 minutes ago, Khris said:

what about samsung products? isn't that how all electronics are anyways?

Alright, We shall. Samsung S8 launch price was 724.99, Cost to make 313.50, That's around 2.4x.  Apple is far higher.

[DrMacintosh]

7 minutes ago, Warboy said:

It's not worth it

That's why you live in a free market. 

 

In reality is a 2.8x margin that much? If you had a brand name like Apples, the image of being luxury already, and the manufacturing ability to proove it you would be a fool not to charge at least double. 

 

Not to mention they have to support all their services, employees, buildings, and contracts. 

[Krazed]

Might be worth noting; A Dominos Cheese pizza costs .50 cents to make, and sells for $5AUD. Pretty sure this is how the world works. 

Is a 64% markup really that bad if you factor in price to develop, advertise and maintain?

 

[DrMacintosh]

1 minute ago, Warboy said:

That's around 2.4x

2.4 vs 2.8

 

.4 does not constitute "far higher" 

[Guest lilbman]

4 minutes ago, SansVarnic said:

The way of capitalism.

Let's please not turn a discussion about Apple's profit margins into a political discussion.

 

Apple has a right to sell their product for however much they want.  Yes, I agree, most of their products are overpriced but it's not like there are not alternatives for the consumer.  Reuter's evaluation doesn't take into account a whole bunch of things like marketing, shipping, and contracts.

[General Winter]

as much as i agree its all about supply and demand and apple products have very high demand despite their lack of quality, specs, ethics, etc.

 

they give tech a simple makeover and mark up the prices and call it "the latest tech" despite being gens behind but with a gimmick attached

 

 

you can't argue with success however and apple fans have never been the brightest

[DrMacintosh]

1 minute ago, General Winter said:

despite their lack of quality, specs,

uhhhhhh

 

What? Maybe on the Mac but in the mobile sector Apple is leading in specs. 

[dizmo]

BOM is no where near all that goes into a product. Articles like this are pathetic.

 

1 minute ago, General Winter said:

as much as i agree its all about supply and demand and apple products have very high demand despite their lack of quality, specs, ethics, etc.

 

they give tech a simple makeover and mark up the prices and call it "the latest tech" despite being gens behind but with a gimmick attached

 

you can't argue with success however and apple fans have never been the brightest

Or if they want iOs. Not really anything else you can get it on, and it doesn't make the purchaser stupid.

Not everyone needs the latest and greatest in a device. Apple products have (generally) had excellent build quality.

[SansVarnic]

19 minutes ago, lilbman said:

Let's please not turn a discussion about Apple's profit margins into a political discussion.

 

Apple has a right to sell their product for however much they want.  Yes, I agree, most of their products are overpriced but it's not like there are not alternatives for the consumer.

Simple observational comment, nothing political (beside I changed it before you quoted me). Being a mod, do you honestly think I would inject political discussion just to lock it after?

 

 

Luminati confirmed ..... 

[ARikozuM]

1 minute ago, Warboy said:

Alright, We shall. Samsung S8 launch price was 724.99, Cost to make 313.50, That's around 2.4x.  Apple is far higher.

Price to spay a 60lb dog: $160 + tax

Cost to spay a 60lb dog: $33 and that's including the anesthetics and tranquilizers AND the 14-minutes it takes me to find the ovaries through a one-inch incision (for reference, my vet school taught three-inch incisions for this procedure). 

[dizmo]

1 minute ago, DrMacintosh said:

uhhhhhh

 

What? Maybe on the Mac but in the mobile sector Apple is leading in specs. 

Erm. Not quite. But that depends entirely what you focus on. They've always had tiny batteries, lower screen resolution, way less RAM. Sure, the OS doesn't need the RAM (since they haven't had the greatest multitasking), and the battery suits the lower resolution, but that doesn't change the fact that they have less.

[vanished]

I know everyone is probably going "omg that's so much profit" but I'm actually thinking the opposite... last I heard most smartphones have something like a ~$150 "BOM cost", maybe up to $200, so to see the iphone costs that much to build suggests they really did go all out on the hardware.  And also, before you assume that the difference between cost to build and price to sell is all profit, it's not it's revenue.  That has to go to cover R&D, long term support, taxes, and generally "keeping the lights on".  What ever is left over is profit.

[Warboy]

11 minutes ago, vong said:

I see you don't know how companies work. They gotta make a profit to pay for workers, advertising, shipping and a bunch of other things.

I see you don't know how context works. I guess someone has to pay for the worker's safety nets.

 

11 minutes ago, DrMacintosh said:

That's why you live in a free market. 

 

In reality is a 2.8x margin that much? If you had a brand name like Apples, the image of being luxury already, and the manufacturing ability to proove it you would be a fool not to charge at least double. 

 

Not to mention they have to support all their services, employees, buildings, and contracts. 

 

9 minutes ago, DrMacintosh said:

2.4 vs 2.8

 

.4 does not constitute "far higher" 

 

0.4 matters, simplifying it like that leads you no where.

 

 

 

8 minutes ago, General Winter said:

you can't argue with success however and apple fans have never been the brightest

That seems to be a understatement.

[divito]

5 minutes ago, vong said:

I see you don't know how companies work. They gotta make a profit to pay for workers, advertising, shipping and a bunch of other things.

That's incorrect if we're being technical. Profit is above and beyond your operating expenses/costs to produce. They don't have to make a profit.

However, the profit does help in future acquisitions, R&D, and a host of other areas not expressly related to the cost of producing said device.

[SansVarnic]

Here is why the iPhone X cost wht is does ...

Quote

 

“There is an old story of a boilermaker who was hired to fix a huge steamship boiler system that was not working well.

After listening to the engineer’s description of the problems and asking a few questions, he went to the boiler room. He looked at the maze of twisting pipes, listened to the thump of the boiler and the hiss of the escaping steam for a few minutes, and felt some pipes with his hands. Then he hummed softly to himself, reached into his overalls and took out a small hammer, and tapped a bright red valve one time. Immediately, the entire system began working perfectly, and the boilermaker went home.

 

When the steamship owner received a bill for one thousand dollars, he became outraged and complained that the boilermaker had only been in the engine room for fifteen minutes and requested an itemized bill. So the boilermaker sent him a bill that reads as follows:
For tapping the valve: $.50
For knowing where to tap: $999.50
TOTAL: $1,000.00”

 

At the end of the day, education will most likely help you to find-a-job, while education combined with {insight x creativity} will enable you to define your future.

 

The story which I copied is a variant of the one I know but this works quite well.

[Warboy]

Just now, SansVarnic said:

Here is why the iPhone X cost wht is does ...

The story which I copied is a variant of the one I know but this works quite well.

I think in apple's case, It's more like

{name here} could take a crap, wrap it in tinfoil, put a couple fish hooks on it and sell it to Queen Elizabeth as earrings.

[vong]

1 minute ago, divito said:

That's incorrect if we're being technical. Profit is above and beyond your operating expenses/costs to produce. They don't have to make a profit.

However, the profit does help in future acquisitions, R&D, and a host of other areas not expressly related to the cost of producing said device.

Yeah was going to mention the profit goes towards future R&D and whatnot.

[heimdali]

If only the parts cost 360, they´re selling it very cheaply.

 

They still need to manufacture it, and everyone in the chain starting with the parts delivered to the factory and ending when it goes into the hands of a buyer wants to make money on it.

 

[SansVarnic]

Just now, Warboy said:

I think in apple's case, It's more like
 

 

It could happen .... <wink>

[Warboy]

Just now, SansVarnic said:

It could happen .... <wink>

I think it already happened, you know, wireless ear buds.