How much money does Apple receive for every iPhone sold?

November 16, 2009 8:36 AM

How much money is Apple actually making per iPhone?

I know for a 16GB iPhone 3G S it costs the user $199 with a 2-year-contract with AT&T. I know that AT&T pays a subsidy to Apple for every iPhone sold.

However, I can't seem to find information (however flaky) on how much AT&T is actually paying, or how much Apple is actually making.

I'm trying to compare the manufacture costs for the iPhone with the number apple is selling the iPhones for to figure out what Apple's profit is. Any information that could help me with that would be appreciated.

Thanks!

posted by ejfox to Technology (10 answers total)

Estimate: Around $216 per phone.
posted by bonaldi at 8:39 AM on November 16, 2009 [1 favorite]

I saw the number $550 floating around in an article this weekend.

"Consumers balked at the high upfront cost. By the second generation of the iPhone, Apple reverted to a traditional subsidy model. The iPhone that now costs consumers $199 actually costs AT&T about $550, according to analysts’ estimates. To cover the subsidy, the Internet price increased to $30 a month."

Source: Is There a Method in Cellphone Madness?, New York Times
posted by JakeWalker at 8:50 AM on November 16, 2009

The $216 number quoted above is estimated profit, I believe.
posted by JakeWalker at 8:50 AM on November 16, 2009

35-40% is the kind of margin Apple shoots for, so that $550/216 smells right.
posted by rokusan at 9:01 AM on November 16, 2009

http://daringfireball.net/linked/2009/11/16/muller-iphone-profits
posted by bengarland at 10:30 AM on November 16, 2009 [1 favorite]

I swapped in a dead iPhone mere hours ago and they gave me a new one. The price was $229 and the rep told me that was their cost. Don't know if it's true or if he was trying to justify not lowering the ridiculous price for a device that was only coming with a 90 day warranty.
posted by You Should See the Other Guy at 2:07 PM on November 16, 2009

Oh, and that was 229 canadian.
posted by You Should See the Other Guy at 2:07 PM on November 16, 2009

I have wondered the same thing about iPods, as they have had a consistent price point of around $250 for years and have heard from travelers that hey sell for less in other countries.
posted by Oireachtac at 12:12 PM on November 17, 2009

Some more datapoints from other countries, where the iPhone is sold as a standalone on prepaid plans:

In the UK on Orange, an 16GB iPhone 3gs is 440 GBP. 15% VAT means that is really 382 GBP, or $634.

In Australia on Vodaphone, the same phone is 929 AUD. 10% GST means that is really 844 AUD, or $731.

(Normally these are closer so maybe the recent currency fluctuations are screwing things up.)
posted by smackfu at 11:01 AM on November 23, 2009

This article here from the WSJ talks about a potential licensing loophole that Apple enjoys on iPhone sales. They estimate Apple pays Foxconn $240 per phone and sells them to AT & T etc for $590.
posted by eb98jdb at 6:50 AM on November 30, 2009