The Apple iPhone is a whopping $499 for the 4GB model on AT&T Wireless and even more – $599 for the 8GB iPhone.
Why so much? Can Apple really justify such a big price tag?
Well it seems that the the iPhone will have an approximate 53% profit margin based on analysis from consulting firm iSuppli which routinely does “Tear down” analysis of electronic components & devices.
iSuppli developed its preliminary functional estimate based on an analysis of the capacity and features of the Apple iPhone, combined with information from materials from Apple, company sources and third-party publications. To further help determine the content of the iPhone, iSuppli leveraged the extensive experience where it has dissected hundreds of pieces of electronic equipment, including music-enabled mobile phones, various models of the iPod and other Apple products.
“iSuppli estimates the 4Gbyte version of the Apple iPhone will carry a $229.85 hardware bill of materials and manufacturing cost and a $245.83 total expense, yielding a 50.7 percent margin on each unit sold at the $499 retail price,” said Andrew Rassweiler, teardown services manager and senior analyst for iSuppli.
Meanwhile, the 8GByte Apple iPhone will have a $280.83 total manufacturing price tag, amounting to a 53.1 percent margin at the $599 retail price.
What does that mean for you iPhone-owner-wannabe? It means that you may be able to get your hands on an iPhone for less than the full retail price. One way is if Apple & AT&T Wireless discount the phones since they have such a hefty margin on the cell phone. Although this may not happen if the iPhone is a hit like the iPods have been, which would give Apple supply-side leverage to keep prices where they are.
The other more realistic way is for you to purchase the iPhone from an authorized AT&T wireless agent that will subsidize the price of the Apple iPhone with part of their own commission for the sale. This happens all the time which is why you see offers for discounted or free cell phones, even though they have $199 or more price tags at the corporate store like the Free Samsung Blackjack offer.
We’ll all be on the lookout for the best place to get the Apple iPhone over the next few weeks. If you score an iPhone for less than the retail price, please share it with us and post a comment below!