The iPhone 5 is going to be another huge success for Apple. This is a foregone conclusion. The company sold nearly 30 million iPhones last quarter, and that number is expected to grow with the introduction of the iPhone 5.
So how much profit does Apple make on each iPhone? We know that last quarter, with sales of 26 million iPhones the product line brought in approximately $16 billion in direct revenue, around 46% of the company’s entire take-home for the quarter. About $167.50, according to TechInsights. The company’s research found that the display costs $18, the camera costs $10, the processor is priced around $28, and a variety of other parts costs between $4.00 and $38.
The biggest expenditure for Apple is the A6 chip, which costs $28; the Qualcomm baseband chip costs $25. That upgraded Retina display only costs Apple $18 to manufacture, only $3 more than the previous 3.5-inch part. While these are still estimates based on what TechInsights knows about the supply chain, it’s clear that Apple’s sizeable margin is no less than it was a year ago with the iPhone 4S.
The Apple iPhone 5 comes in either white and silver or black and slate. Its prices start at $199 for 16GB (with a two-year service contract). The iPhone 5 will be available in the US for a suggested retail price of $199 for the 16GB model, $299 for the 32GB model and $399 for the 64GB model.
If each phone nets Cupertino $482, or somewhere close to it, you begin to understand why Apple has $100 billion sitting around in the bank, and is one of the fastest-growing companies in the world despite its size.
It sure doesn’t look like the cost of the iPhone has risen drastically, so where is that extra revenue going? Straight to the bank.