Too much has already been written about the costs of the components of the Apple (AAPL) iPhone. Several research firms have spent their $599 per unit simply to tear the thing into little pieces and count up the value of the parts. iSupply says that all of the hardware taken together costs Apple $266, giving them a 55% gross margin.
But, all of this work is as misleading as it is incomplete. There has been no analysis of what it cost Apple to develop the project both in terms of engineering man hours and on-going work to keep the product current. Also, no cost analysis for development of new versions. And, there are the delays in the new Mac operating system, Leopard, which became a victim of the iPhone time table. That cost Apple something in terms of deferred or lost revenue.
Gross margins don’t tell much.
The other supposition is that the margins were ever going to be below those for the iPod. Jobs & Co. would not bother to go to effort. He has admitted that Apple’s TV product is an experiment as much as a product. Industry analsysts say that its gross margins for that product are not high. But, it is not the product that takes the stock to $200.
The iPhone is. The margin on the handset was always going to be as good or better than the iPod.
Why is anyone surprised?
Douglas A. McIntyre can be reached at [email protected].
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