Apple's margin is about 25%

 

Dude forgot about logistics, marketing, retailer margins and overhead. 

20 minutes ago, Yellowtail said:

Apple's margin is about 25%

 

Dude forgot about logistics, marketing, retailer margins and overhead. 

I think the margin is a bit more than that but you forgot to add in the software development costs.

Let's not forget all the money they make from a big cut of the software which is sold through their system.

22 minutes ago, sometimewoodworker said:

I think the margin is a bit more than that but you forgot to add in the software development costs.

Net? 

 

Just now, OneMoreFarang said:

Let's not forget all the money they make from a big cut of the software which is sold through their system.

Which is a lot higher margin than hardware...

 

 

3 minutes ago, Yellowtail said:

Which is a lot higher margin than hardware...

 

 

Is it? The apple cut is 30% but that is gross and it is unlikely that the operating expenses are as low as to make the net similar or lower than the hardware.

The question is irrelevant. Apple’s objective isn’t on a per phone profit. It’s a mass marketing objective that amounts in the billions. Plain and simple.

3 minutes ago, sometimewoodworker said:

Is it? The apple cut is 30% but that is gross and it is unlikely that the operating expenses are as low as to make the net similar or lower than the hardware.

That's a good point, but because the 30% is a fee/commission, and I think the other 70% is remitted, so I don't think it's considered revenue, but I'm not sure. 

 

 

 

 

29 minutes ago, Yellowtail said:

That's a good point, but because the 30% is a fee/commission, and I think the other 70% is remitted, so I don't think it's considered revenue, but I'm not sure. 

The 70% is absolutely not Apple revenue. It is only the 30% that is Apple revenue and that is gross the costs involved are unlikely to be as low as 4%~5% of the total charged to the customer, so the Apple net is going to be in the same region as the hardware net, isn’t it?

49 minutes ago, sometimewoodworker said:

The 70% is absolutely not Apple revenue. It is only the 30% that is Apple revenue and that is gross the costs involved are unlikely to be as low as 4%~5% of the total charged to the customer, so the Apple net is going to be in the same region as the hardware net, isn’t it?

I don't know what the margin is on hardware, and I'm sure it varies significantly, but unless I'm missing something, assuming the 30% is revenue and $100 is the total:

Costs of 5% of a $100 are $5

$5/$30 is ~17% so net margin would be 100-17 = 83%

At 10% cost, net margin is 66%

At 20% cost, net margin is 33%

At 22.5% cost, net margin is 25%