I promise this is my last iphone post for now at least. The really cost for making an iphone is only $220 adding $80 more for assembly and shipping and advertising included will only make it $300. So apple is making $300 on every 8gb and $280on every 4Gb phone they are selling. That’s huge margin, this also gives apples a good margin to drop the price later if the demand comes down. Read more here about iphone costs.
Everyone is talking about how fast iphone is selling etc. To put this into perspective the best phone ever sold was Motorola Razr.
Motorola Razr
750,000 in first month and in 5 years 50 million units worldwide
Iphone
700000 in first week so can it beat the Razr, I personally think it will not because Razr was subsidized by the provider and iphone will not be so not many people will be buying $600 phones. At least not 50 million of them.
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I think you have 3 major flaws: 1. You must add in the years of tech development costs. 2. Based on the numbers Apple has spent on marketing, more then that $80** figure should be added. 3. The home furniture industry has a standard 35% mark-up, so Apple is actually in the same mark-up percentages as most other industries, especially fellow electronics.Reply from PrasanthI too want apple to make profit so that they can make many more cool products.But that doesn’t mean they have to make all the profit on one sale. Why did they reduce theprice by that much after few months. Its not like they are only making profits on iphone alone.They are also making profits on ever at&t user. So imagine a iphone at 199 or even 100 dollars.They could have had the whole mobile industry to themselves by now.They also make money through itunes store not huge but still quite a bit, and they also getmoney from third party accessory makers.They could have made same profits if not higher in the volume if they would have gone with theabove mentioned price points. And even got a higher percentage from the carrier if more peoplehad iphones.I think they missed a big opportunity with that price. Also i think apple likes to be small in markets.So they price their products at a higher price point.thank youprasanthwww.prasanthtechblog.com