According to a preliminary analysis by iSuppli, Apple Inc. and Cingular Wireless stand to make a 50 percent gross margin off of the iPhone. Their functional Bill of Materials estimate points to a $245.83 total expense for the 4 GB model which, at a $499 retail price, yields a 50.7 percent margin. The margin only increases for the 8 GB model which, at a $280.83 total expense against a $599 retail price yields a 53.1 percent margin.
With such products as the iMac and iPod nano, Apple has seen margins as high as 45 percent. iSuppli forecasts, however, that extensive competition in the music phone department, escalating to as many as 835 new models in 2007 alone, will compel Apple to cut iPhone prices over time.
Overall, iSuppli predicts shipments of music-enabled phones in 2007 to rise 39.9 percent over last year, leaping from 441.7 million units to 618.1 million and hitting 1 billion by 2010.
David Thomas, CEO at Evident, is an accomplished cybersecurity entrepreneur. He has a history of introducing innovative technologies, establishing them in the market, and driving growth – with each early-stage company emerging as the market leader.