Jump to content



Photo

$649 iPhone 5s Costs Apple $199 To Make


  • Please log in to reply
46 replies to this topic

#1 Pupik

Pupik

    Neowinian Senior

  • 6,179 posts
  • Joined: 09-December 05

Posted 25 September 2013 - 00:32

The new iPhone 5s costs Apple about the same to build as last year's iPhone 5, according to a report from IHS. The company has torn down both the iPhone 5s and 5c, and assessed where the internals came from and what they cost.

 

The bill of materials for the 16-GB iPhone 5s comes to about $191. The device costs about $8 to manufacture, bringing the total to $199. The 64-GB model costs Apple only $19 more to make, for a total of $218. The full retail price of the 16-GB 5s is $649, while the 64-GB 5s goes for $849. It's a shame Apple is only marking the price up by (a minimum of) 326%.

http://www.informati...e-199/240161733




#2 vetsanctified

sanctified

    Your order is meaningless. My chaos is significant.

  • 21,009 posts
  • Joined: 29-November 01
  • Location: ø
  • OS: OS X 10.9 and Xubuntu 14.04
  • Phone: An awesome Moto X for $150 off contract.

Posted 25 September 2013 - 00:35

Again, these articles always ignore that the cost of production is not the only thing that affect a product's cost. You have to consider all the iphone staff (including assembly line workers) payment, publicity, retailer contracts, carrier contracts with the company, etc.



#3 +SOOPRcow

SOOPRcow

    Neowinian

  • 1,553 posts
  • Joined: 18-April 02

Posted 25 September 2013 - 00:36

I'm no apple fan boy by any means but I really do hate stuff like this. Of course that is just raw parts and assembly. It doesn't include any of the labor and research that went into developing the product. No doubt they are still making a significant amount of money but it's not a "minimum" of 326% markup. It's probably not anywhere close to that. (And yes, I understand they address this in the article to a very minor degree but it is still a pretty misleading article)



#4 Roger H.

Roger H.

    Neowinian Senior

  • 12,886 posts
  • Joined: 18-August 01
  • Location: Germany
  • OS: Windows 8.1
  • Phone: Nexus 5

Posted 25 September 2013 - 00:39

Since Apple is not a non-profit company last time I checked good on them for bringing in the most money possible. Obviously they don't make that much on every phone sold (others before me pointed out all the others costs involved besides the B.O.M.) but i'm sure they still bring in a sweet amount of change.... $15-30/phone..... maybe $50?



#5 theyarecomingforyou

theyarecomingforyou

    Tiger Trainer

  • 16,419 posts
  • Joined: 07-August 03
  • Location: Terra Prime Profession: Jaded Sceptic
  • OS: Windows 8.1
  • Phone: Galaxy Note 3 with Galaxy Gear

Posted 25 September 2013 - 00:40

And a cup of coffee doesn't cost £3 to make yet businesses have to pay staff, pay rent and make a profit. That said, there's little doubt that Apple products are massively overpriced.



#6 NeoandGeo

NeoandGeo

    Neowinian

  • 403 posts
  • Joined: 10-February 09

Posted 25 September 2013 - 01:08

Again, these articles always ignore that the cost of production is not the only thing that affect a product's cost. You have to consider all the iphone staff (including assembly line workers) payment, publicity, retailer contracts, carrier contracts with the company, etc.

 

First reply is a business reaming apologist. That's original.

 

The cost of research and development goes into every electronic device, yet phones are the only ones marked up this high relative to the cost of the parts used to manufacture. Why does an iPod 5g cost half of an iPhone 4s when the only notable difference is the absence of cell radios? Cell phone markups are absolutely absurd and you know it.



#7 farmeunit

farmeunit

    The other white meat.

  • 2,908 posts
  • Joined: 05-May 03
  • Location: Branson, MO USA

Posted 25 September 2013 - 01:24

Since Apple is not a non-profit company last time I checked good on them for bringing in the most money possible. Obviously they don't make that much on every phone sold (others before me pointed out all the others costs involved besides the B.O.M.) but i'm sure they still bring in a sweet amount of change.... $15-30/phone..... maybe $50?

I agree there are other costs, but they make a LOT more than you think:

http://www.reuters.c...E86P1NI20120726

 

That's from last year, but will give you an idea of profit on each device.



#8 einsteinbqat

einsteinbqat

    Neowinian

  • 1,329 posts
  • Joined: 16-May 02

Posted 25 September 2013 - 01:24

We should calculate the cost of a Rolex watch or a Ferrari, and then compare it the price tag. I suppose that there must barely be any mark-ups there. The price that you pay for the aforementioned products must be really close to their parts prices! /s



#9 Xilo

Xilo

    Neowinian Senior

  • 5,323 posts
  • Joined: 28-May 04
  • Location: Austin, TX

Posted 25 September 2013 - 01:28

Clothes anyone? Pennies to make but huge ass markup.



#10 spenser.d

spenser.d

    Neowinian Senior

  • 10,915 posts
  • Joined: 19-December 03

Posted 25 September 2013 - 01:33

We should calculate the cost of a Rolex watch or a Ferrari, and then compare it the price tag. I suppose that there must barely be any mark-ups there. The price that you pay for the aforementioned products must be really close to their parts prices! /s

 

To be fair, neither of those companies are selling 9 million of anything over a weekend.  That being said Apple is just selling them for what people will buy them for and I can't really fault them for that.  If you've got a problem with it, there are plenty of cheaper (and arguably better) options out there.  If you want one that bad, suck it up and get one.



#11 dead.cell

dead.cell

    My Body My Temple

  • 10,282 posts
  • Joined: 09-July 04
  • Location: Houston, TX
  • OS: Win 7 Pro / Win 8 Pro
  • Phone: Samsung Galaxy S5 Active

Posted 25 September 2013 - 01:34

Yes, let's lower the price of a phone that's selling millions over a launch weekend. That makes sense...

 

Some people don't know how to run a business apparently.



#12 Mr Nom Nom's

Mr Nom Nom's

    Neowinian Senior

  • 2,436 posts
  • Joined: 08-January 11
  • OS: OS X 10.9.2
  • Phone: iPhone 5S 'Space Grey' (64GB)

Posted 25 September 2013 - 01:39

First reply is a business reaming apologist. That's original.

 

The cost of research and development goes into every electronic device, yet phones are the only ones marked up this high relative to the cost of the parts used to manufacture. Why does an iPod 5g cost half of an iPhone 4s when the only notable difference is the absence of cell radios? Cell phone markups are absolutely absurd and you know it.

 

Yet you ignore all the other costs he listed plus the etc. part at the end; there are a mountain of patents that have to be paid ranging from hardware though to audio compression and so on. Apple does have high margins, above the industry average of 27%, but it is no where near the claim of the article that the OP posted.



#13 Cocoliso

Cocoliso

    Neowinian

  • 103 posts
  • Joined: 13-July 09

Posted 25 September 2013 - 02:02

Clothes anyone? Pennies to make but huge ass markup.

+1 spot on. The biggest rip off in history...well that and movie popcorn :laugh:



#14 vcfan

vcfan

    Doing the Humpty Dance

  • 5,014 posts
  • Joined: 12-June 11

Posted 25 September 2013 - 02:10

the only reason why companies can get away charging these high prices of phones is because of multi year contracts, which give the illusion to people that they're getting the phone for only a hundred of two hundred dollars.



#15 Growled

Growled

    Neowinian Senior

  • 41,508 posts
  • Joined: 17-December 08
  • Location: USA

Posted 25 September 2013 - 02:12

Again, these articles always ignore that the cost of production is not the only thing that affect a product's cost. You have to consider all the iphone staff (including assembly line workers) payment, publicity, retailer contracts, carrier contracts with the company, etc.

 

That's true but even then they made one hell of a profit.