back to article How many $$$s does Apple make from an iPhone?

Apple's figures came out on Tuesday, revealing that all is going well in Cupertino, but analysts crawling over the details are trying to work out if they reveal anything else besides - such as the revenue cut Apple is getting from every iPhone in use. The details of the deal Apple did with AT&T, and more recently with O2, T- …

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jai
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so keen to stop unlocking?

i'm confused why everyone keeps on harping on about Apple being so keen to crack down on the unlocking of the iPhone.

they've only released a single upgrade so far that broke phones which had been unlocked, and they gave fair warning beforehand that they thought there was a risk that hacked iphones would not be compatible with the upgrade.

in addition, the 1.1.1 firmware has been hacked for over 2 weeks now and yet Apple haven't rushed out 1.1.2 to fix the tiff exploit that is required to hack the iphone in the first place which allows you to unlock it.

seems to me if they were as keen as you claim they are, they'd have rushed out a patch the day after the hackers first annouced they could crack 1.1.1

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It's news Jim, but not as we know it

So a company founded on the premise of making money actually succeeds. Not really news, is it?

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Stop

Is this really working for Apple?

MS and Nokia floundering? Read your own reports on how many iPhones have been unlocked and how long with this model work at all for Apple once Orange in France bring out an unlocked version.

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Entertainment for Beancounters

These endless "how much does apple make from" series is a bit tedious. iPhone here, iPod model [x] yonder and iMac mini there. Even if it made sense, it would be interesting and entertaining only for... a special type of `people' (sensu latu).

When are you going to do a series "how much does Lenovo make on..", or Toshiba or HP or Nokia? I know you're just republishing other peoples stuff but chrissakes...

Ah, now I geddit! The underlying idea is "anything apple makes = toys", because all other beancounterism was practiced on PSP, PS3, XBox, X360's etc.

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Rob
Jobs Horns

Clarification please

What service are we talking about? The actual iPhone, as in you are only really renting the device from the Network provider and Apple or the cut Apple take from the Network who provides the service?

All in all though, seems like Apple have a good revenue model that's good for them and their partners but a complete rip-off for the consumers.....

....

....

(ok I thought about not saying it but couldn't resist) but then if your iFan being rip'd off is all part of the prestige of being an iOwner.

Whilst enacting Reg Club rule 8, may I also remind people of Reg Club rule 3, now let the fighting commence.

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Selling a service???

Hi,

I don't see in the iPhone deal what service Apple is selling/providing... except if letting you use a product you bought is a service!

Apple has managed to go beyond vapor-ware, their main revenue will be selling "nothing", or the right for mobile operator to sell subscription on a non-subsidised product.

Sounds a bit like consummers are considered stupid cash-cows, and it seems they were totally right to see them that way; people paying back to the operator more than the subside for any other mobile, for a mobile they pays full price in the first place.

I never saw a car manufacturer getting a share on the petrol you put in the tank, locking the cd player so you have to buy the music from them, and charging you (again) for the horn tone...

Go on Apple, as long are people are happy to pay for having the right to buy your product...

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Jobs Halo

Capital cost plus contract

What is truly astonishing about the pull of the Apple brand is that they've managed to (or will manage to) break the UK philosophy of getting a free phone with a pricey contract OR buying the phone outright then using a cheap no-strings contract (pay-as-you-go).

Apple and O2 are planning to charge us the full cost of the iPhone, AND charge a £35-£55 monthly contract. And they'll get away with it, too.

Much as it annoys me (particularly as I'm stupid enough to fall for it, and will be buying one), I have to admire their marketing abilities to be able to hype a product up so much that people will unquestionably break their usual purchasing patterns.

And Apple are raking it in from all directions - the cost of the phone, the ongoing contract, the music and video downloads... I might as well sign over my soul to them, they pretty much own it (or maybe 50/50 with Tesco).

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jai
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re: Selling a service???

Apple don't sell a service to you the user. And you don't pay Apple for any service.

Apple sell you the hardware.

AT&T (and soon O2 and Orange etc) sell you the service of being able to use the phone networks and make calls and data transfers and voicemail etc etc. And you pay AT&T for that.

AT&T then decide to hand part of what you paid them to Apple in order to make sure that none of their rivals are allowed to sell the iPhone as well. It's AT&Ts choice to pay Apple the chunk of your monthly payment but it means they get the majority of the iphone purchasers on their network, so they're happy.

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NOT profit: ignores apples development costs

Your analysis just looks at marginal costs, and completely ignores the sunk R&D costs apple put into the iPhone.

Apple has put significant resources into developing the iPhone over the years, and needs to cover that. I imagine the iPhone won't actually break even until end of this year. While a lot of the dev costs are shared with desktop-OS X, much of them (e.g. UI/hardware) are new.

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Anonymous Coward

Yawn...

...what a boring article - why did anyone waste time writing it (and why am I wasting time commenting on it)?

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Stu
Jobs Horns

A Shame

@Ian Ferguson + others

Its a real shame you're going to go for the iPhone. I considered it myself until I added up the total costs - even if it is spread out over 18mths its still daylight robbery at >£900.

Its much more powerful a statement to turn around to Apple+O2 and say - WE'RE NOT BEING SUCKERED. Just make a stand and say OY, APPLE, NOOOO. The pull, though, towards the hottest gadget on the planet, is going to be greater than the cost factor for most (or just ignorant about them) which is why Apple will win.

I just wish EVERYBODY were told the total costs they have to pay at the point they purchase it, that should turn at least some people away before they commit.

Don't get me wrong, I love the iPhone, I've used one. But the cost is just too high, financially and morally.

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Whats so good?

Just out of interest, i've read the reviews, i've seen the pro's and con's.. and well,

WHATS THE DEAL!!??!

its just another smart phone with an apple logo stuck on the back, except its more limited than other smart phones. I can understand the apple victims getting them, but even your average Joe wants to go and buy one?!?! has the world gone mad?

Now i am not an anti-apple campaigner, i see apple as a designer PC (yes i said it, PC) but in terms of hardware, they use a lot of foxxcon parts, which arent exactly renown amongst the PC industry for "high end". And then theres lawsuits with certain models which jsut stop working after a certain time due to a dry joint.. so tell me... why do people see me day in day out and come up with the argument that "theyre more stable" or "more reliable" with out any evidence?!!?

rant over

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UK Profits from Iphone ?

In the US, I'm sure that such a mark up is achievable, but in the UK I think O2 and Apple maybe be far less confident of the BIG iphone rush.

The problem is that last year all the mobile companies sprung the 18 month contract trap and there are loads of techno and fashion junkies locked into these.

The 18 month contract is now know for what it is...a set of handcuffs.

The fact that we have to also pay some £260 for the privilege of buying into this iphone contract as well, really doesn't sit well with me and several others.

So will Apple be doing the same level of business with the iphone in the UK...I doubt it. The only thing that might help the iphone is the fact that neither Nokia, SE or Samsung have anything like it. So for novelty value, the punters might think about buying into the iphone dream...that is until they realise that they have to pay £260 to buy into an 18 month contract with a mediocre phone with few apps and a flash interface.

I will no doubt by an iphone one day, but not this time around and not until it's more of a real phone and not just a fashion accessory.

Next year folks, next year, just about the time that most of the first tranche have woken up to the fact that they still have 6-8months to go on their first contracts.

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