When people think of business, they also think of profits. Apple is no different. In fact, they actually are probably a top profit-grossing company in the world. In March they sold on average 1 billion dollars a day, meaning their profit for the quarter was roughly 23.6 billion dollars. But what many want to know is how much do they make per device or what their margin is, so let’s get right into it.
Apple’s Profitable Business Model
The iPhone 11 Pro Max when first released had a beginning price of $1099 and then the most expensive model would get you for $1449. This seems to be normal these days as far as what to expect when a new model arrives each fall. The breakdown for the parts and cost of the 11 Pro Max are as follows:
- Screen: $66.50
- Battery: $10.50
- Triple Camera: $73.50
- Processor, Modems, and Memory: $159
- Sensors, Holding Material, Assembly, and Other: $181
This makes the total for producing an iPhone 11 Pro Max roughly $490.50. This would mean that Apple’s profit margin would be in the ballpark of 55%-66%. That shows the power of branding, but these costs do not include what may have been spent on research and development or marketing costs. Those two factors would likely decrease the margin numbers above, but all in all, those numbers are still phenomenal.
When shopping with Apple you know you will receive a quality product backed with their 1-year manufacturer’s warranty. Now, this is all fine and dandy if you only plan to keep the phone for a year then trade it in for an upgrade, but if not, after that one year what are you left with to do? Luckily, they do offer you Apple Care for an extended 2-year warranty for the device at the time of purchase, so this is encouraged if you’ll be hanging on to the device for longer than one year.