27/09/2012

It takes just $167.50 to manufacture an iPhone 5!

The Black iPhone 5        credits: Apple Store

According to Geeknizer, Apple has to shell out just $167.50 to get an iPhone 5 ready to be in the market. For the sake of some number crunching, the unlocked 16GB version of the iPhone 5 has been priced $699. An estimate suggests that Apple shall manage to sell around 20 million units of the over-hyped smartphone.
Source: Geeknizer[dot]com

That means Apple has a margin of $536 per iPhone 5 they will be selling. Of course, the marketing funds and many other expenses need to be shelved out, but still if we take a gross total of Apple's profit from the sales of iPhone 5 alone will be (699-167.50)*20,000,000 USD = 106.30 billion USD. Don't get overwhelmed with the calculations, and you don't need to cross check either because I used a nice and pretty calculator on my android for these calculations. Taking into account the highly active promotion of iPhone 5, let's cut out 20 billion dollars: Apple will still take home a cool $85 billion. Such high sales are the reason why Apple is the current largest company in the world trading at about $626 billion.

Personally I feel, iPhone series is the most "over-hyped" product the world has ever seen. I totally agree with Henry Blodget's statement:
"And yet, for a variety of reasons--one of which may include the most effective corporate brainwashing campaign in the history of mankind--these thousands and thousands of people around the world are, once again, trading valuable hours of their lives to wait in line for the new iPhone."
People camping for the iPhone 5                                              source: Business Insider

Otherwise, I don't think iPhone 5 or iOS 6 add anything new to the technology world. Everything's that's been "innovatively crafted" into the iPhone 5 has been on the Android smartphones from the past few years. Still so much buzz! Only Apple can do that.

Getting back to the stats part, the most expensive part in the phone, as expected, is the dual core A6 processor that is powering the device which takes $28 to manufacture. Comparing the manufacturing cost of iPhone 5 with the previous iPhone, i.e. iPhone 4s, the newer iPhone costs about $25 more.

Share your views about the cool money Apple will make off iPhone 5 in  the comments section below. And share this story with your friends to let them know that the iPhone 5 they're having or planning to have isn't actually that expensive.
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