Feeds

Apple prices iPhone at $666, says analyst

Devilishly good margins made

The Power of One Brief: Top reasons to choose HP BladeSystem

The Jesus phone costs carriers a diabolic $666 on average, one Wall Street analyst has claimed. That figure brings Apple enough margin to hack prices and "take over the smartphone market".

So forecasts Needham & Co. analyst Charlie Wolf. “Our analysis indicates that the average price of an iPhone was $666 in the fourth quarter with close to a 50 per cent gross margin," a number of websites report.

That margin has filled Apple's coffers, making for what Wolf called an "astonishing increase in Apple’s revenues".

"Apple’s non-GAAP revenues were 48 per cent higher, its gross profits were 66 per cent higher and its net income was 114 per cent higher than the corresponding GAAP metrics," he said.

Kerching.

All of which allows Jobs and Co. to cut the cost of the iPhone 3G to carriers, who, in turn, can lower subsidised prices - perhaps to no more than $99 (£63) in the US.

Here in the UK, it's already available for nowt but a £45-a-month airtime subscription, though if you pay less, the handset's price tag rises to £99 ($155). If Apple cut its prices, O2 could give the thing away on any tariff.

ATT prices the phone at $199 (£127), so it's subsidising the phone to the tune of $467 (£298) if Wolf's $666 calculation is correct.

All this means "Apple has considerable flexibility to reduce the price of the phone in tandem with its subsidized price," said Wolf. "If Apple were to pursue this strategy, the iPhone could effectively take over the smartphone market."

Outselling RIM is only the start, it seems.

Apple iPhone 3G review

Using blade systems to cut costs and sharpen efficiencies

More from The Register

next story
Report: American tech firms charge Britons a thumping nationality tax
Without representation, too. Time for a Boston (Lincs) Macbook Party?
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Child diagnosed as allergic to iPad
Apple's fondleslab is the tablet dermatitis sufferers won't want to take
Microsoft takes on Chromebook with low-cost Windows laptops
Redmond's chief salesman: We're taking 'hard' decisions
For Lenovo US, 8-inch Windows tablets are DEAD – long live 8-inch Windows tablets
Reports it's killing off smaller slabs are greatly exaggerated
Cheer up, Nokia fans. It can start making mobes again in 18 months
The real winner of the Nokia sale is *drumroll* ... Nokia
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.