How many $$$s does Apple make from an iPhone?
Number crunching with Apple
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Apple's figures came out on Tuesday, revealing that all is going well in Cupertino, but analysts crawling over the details are trying to work out if they reveal anything else besides - such as the revenue cut Apple is getting from every iPhone in use.
The details of the deal Apple did with AT&T, and more recently with O2, T-Mobile and Orange in Europe, are under held under the greatest secrecy, so of course everyone wants to know. We all know that the iPhone is sold at a profit, and that a percentage of subscription revenue goes to Apple for every iPhone user, but getting to the actual figures isn't easy.
iSuppli did a great job pricing up all the bits of an 8GB iPhone at $265. It's been accurate in the past, so we've no reason to dispute its figure, which puts the income from every iPhone sold at $134.
Then there's the Apple cut from the subscription charged by the operator.
We nailed our colours to the $3/$11 amount, for repeat/new subscribers respectively, calculated by analyst Gene Munster back in July. But based on Tuesday's figures Mr Munster has upped his estimate to $18 per subscriber. If true, that's $432 per customer over the two year contract, dwarfing the profit Apple makes on the hardware.
Given 1.8 million iPhones, Apple's due almost $800m over the next two years, after taking $240m on the hardware.
This goes a long way towards explaining why Apple is so keen to stop punters unlocking their handsets. Unlocked handsets don't bring in subscription revenue, though, of course, $240m isn't to be sniffed at it.
Not everyone agrees with Mr Munster's new figures. Richard Gardner from Citibank has examined the same statements from Apple and came up with $12 a month, and based on what we've heard we're sticking to the $3/$11 estimate.
Either way, it's clear that Apple has started the transition from a company selling a product to a company selling a service, while Nokia and Microsoft can only look on jealously as their own plans in that direction continue to flounder. ®
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COMMENTS
UK Profits from Iphone ?
In the US, I'm sure that such a mark up is achievable, but in the UK I think O2 and Apple maybe be far less confident of the BIG iphone rush.
The problem is that last year all the mobile companies sprung the 18 month contract trap and there are loads of techno and fashion junkies locked into these.
The 18 month contract is now know for what it is...a set of handcuffs.
The fact that we have to also pay some £260 for the privilege of buying into this iphone contract as well, really doesn't sit well with me and several others.
So will Apple be doing the same level of business with the iphone in the UK...I doubt it. The only thing that might help the iphone is the fact that neither Nokia, SE or Samsung have anything like it. So for novelty value, the punters might think about buying into the iphone dream...that is until they realise that they have to pay £260 to buy into an 18 month contract with a mediocre phone with few apps and a flash interface.
I will no doubt by an iphone one day, but not this time around and not until it's more of a real phone and not just a fashion accessory.
Next year folks, next year, just about the time that most of the first tranche have woken up to the fact that they still have 6-8months to go on their first contracts.
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Whats so good?
Just out of interest, i've read the reviews, i've seen the pro's and con's.. and well,
WHATS THE DEAL!!??!
its just another smart phone with an apple logo stuck on the back, except its more limited than other smart phones. I can understand the apple victims getting them, but even your average Joe wants to go and buy one?!?! has the world gone mad?
Now i am not an anti-apple campaigner, i see apple as a designer PC (yes i said it, PC) but in terms of hardware, they use a lot of foxxcon parts, which arent exactly renown amongst the PC industry for "high end". And then theres lawsuits with certain models which jsut stop working after a certain time due to a dry joint.. so tell me... why do people see me day in day out and come up with the argument that "theyre more stable" or "more reliable" with out any evidence?!!?
rant over
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