How much does Apple make on an IPhone 14 Pro max ?

[Social Media]

 

[Yellowtail]

Apple's margin is about 25%

 

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

[sometimewoodworker]

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.

[OneMoreFarang]

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

[Yellowtail]

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? 

 

[Yellowtail]

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...

 

 

[sometimewoodworker]

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.

[novacova]

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.

[Yellowtail]

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. 

 

 

 

 

[sometimewoodworker]

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?

[Yellowtail]

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%