14 DAY TRIAL // For most people, Apple's recently launched iPhone only represents a revolutionary cellphone with a very nice design and an outstandingly easy to use and good looking interface.
Apart from that, there still are people that have dreams about the touchscreen that has made a lot of Apple fans almost wet themselves at the first glance of the iPhone presented by Steve Jobs during his MacWorld keynote (aka stevenote).
From the point of view of the ones getting the money from selling the iPhone handsets, the story is totally different. They don't see the touchscreen that lots of people have been dazzled by as such an innovative thing because they know exactly what it is worth. That 3.5 inch LTPS touchscreen with a resolution of 320 x 480 pixels only costs 33.50 $. Not as much as you thought, is it?
The things don't stop here because the guys that got the full cost breakdown of both iPhone models, the iSuppli analysts, have summed up the hardware bill of material and the manufacturing costs and ended up with a cost of only 245.83 $ for the 4 GB model and 280.83 $ total expense for the 8 GB one.
If one does some math and calculates the profit obtained and shared by Apple and AT&T, he/she will end with some outstanding figures. The 4 GB model will get them a 50.7 percent margin at a 499 $ retail price and the 8 GB one a 53.1 percent margin at a 599 $ retail price.
Sounds like a lot of money going in the Apple and AT&T bank accounts for each unit and it really is. It is not the first time when Apple has achieved such high profit margins because, if you remember, they also got over 45 percent profit from products such as the iMac and the iPod nano so this is not such a big surprise after all.
But, if you don't have the skills and the means to make yourself an iPhone at the price iSuppli has ended with, you will have to pay that money anyway.
There are slight chances the prices will drop on both versions of the iPhone because the analysts expect a stiff competition for the Apple handset on the cellphone market.
As Jagdish Rebello, director and principal analyst at iSuppli, has said "with a 50 percent gross margin, Apple is setting itself up for aggressive price declines going forward."
Let's not get sad for Apple though because the launching prices for the iPhone models leave a lot of room for a substantial price cut down and don't be surprised if they will actually do it in case the sales drop.
