p2pnet - rss feed: iPhone 50% gross margin
p2pnet.net News:- Each iPhone sold will generate nearly a 50 percent gross margin for Apple and its partner, Cingular Wireless, giving the companies a hefty profit, as well as plenty of room for future price cuts, according to research firm iSuppli.
So says Apple Insider, quoting iSuppli.
“Based on a preliminary functional Bill of Materials (BoM) estimate, the firm calculates that the 4Gbyte version of the Apple iPhone will carry a $229.85 materials and manufacturing cost and a $245.83 total expense, yielding a 50.7 percent margin on each unit sold at the $499 retail price,” and, “the 8GByte model will sport a $264.85 materials cost and a $280.83 total expense, amounting to a 51.3 percent margin at the $599 retail price.” says the story.
But, “While iSuppli has a high degree of confidence in its conclusions, these figures are considered preliminary until we perform an actual physical teardown and analysis of the iPhone,” the firm said in a report released Thursday.
Profits may be up, which is good for Apple. But its shares dropped the most in almost a year after shipments of Macintosh computers, “disappointed investors and the company’s forecast for this quarter missed analysts’ estimates,” says Bloomberg News, going on, “The stock fell 6.2 percent after Apple said yesterday that Mac shipments increased 28 percent to 1.61 million machines last quarter. That was fewer than the 1.75 million computers Wall Street analysts had anticipated, said Gene Munster, an analyst at Piper Jaffray & Co. in Minneapolis. “
And that’s not all shareholders have to worry about.
“He’s more important to the company than almost any other CEO is to any other company,” Bloomberg has analyst Roger Kay saying. “He embodies the company. Any vulnerability on his part is definitely negative.”
This was in reference to the fraud scandal.
Apple the company is said to have found Jobs the boss innocent of any wrongdoing in the scandal, but what happens if he again comes under fire personally as a result of the SEC investigation or if the SEC de-lists Apple?
“His remarkable iPhone demo highlighted the extent to which Steve Jobs is Apple. There’s no obvious successor in sight - which means that, sooner or later, the company’s board will have to address the issue of who follows him,” says John Naughton in The Observer. “And if you thought that BP’s problems in that regard were horrendous, stay tuned …”
Then, “The U.S. Attorney’s Office announced Friday that it has launched a criminal investigation into Apple’s past stock-option grants,” says the San Jose Mercury News, adding, “Many investors would like the issue to go away. But that doesn’t mean they’re not thinking about it.
“Apple’s stock is now a more risky bet thanks to the federal investigation, said Darren Chervitz, director of research at mutual-fund company Jacob Asset Management, which owns Apple shares. The risk to Apple is that the investigation could lead to Chief Executive Steve Jobs’ resignation, just as similar problems at other companies have led to the resignations of their CEOs, he noted.”
Isn’t there a saying about putting all your eggs in one basket? Definitely stay tuned.
Also See:
Apple Insider - Apple may see 50 percent margin on each iPhone sale, January 18, 2007
Bloomberg News - Apple Shares Fall as Mac Sales, Forecast Disappoint, January 18, 2007
fraud scandal - Jobs in forged records scandal, December 28, 2006
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