According to BusinessWeek, Apple (AAPL) sells its iPhone for $499 to $599, but the handset only costs $200 to $220 to make. The figures are from research firm Portelligent.
While the figures may spell short-term good news for Apple, the very large profit that the company makes on the device could encourage both AT&T (T), the exclusive carrier for the phone, and consumers to wonder why they should not get a better deal.
Apple’s profit would certainly allow it to lower the price if it needs to stimulate sales. Bloomberg reports that estimates for initial sales of the phone are about 500,000 units, ahead of most industry estimates.
For now, Apple is getting two benefits–sales volume and gross margin. If it can hold both, the iPhone could be a bigger financial success than most analysts believed.
Douglas A. McIntyre can be reached at [email protected].
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