Apple prices iPhone at $666, says analyst
Devilishly good margins made
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.
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
Sponsored: The Nuts and Bolts of Ransomware in 2016