Apple’s iPhone 4S went on sale last week, and Apple announced that they had sold over four million iPhone 4S units in the first three days. This impressive sales figure highlights the strong demand and popularity of the device. Now, details have been revealed on how much the iPhone 4S costs to manufacture, which would mean that Apple is making a healthy profit for each iPhone 4S sold.
According to Andrew Rassweiler, of IHS iSupply, who performed a teardown on the iPhone 4S, the 16GB model costs Apple around $188 to manufacture, the 32GB around $207, and the 64GB model around $245. These costs include the price of components and assembly but do not account for other expenses such as research and development, marketing, and distribution.
Profit Margins and Pricing Strategy
Considering that the carrier-free version of the iPhone 4S, which Apple will sell next month, costs $649 for the 16GB version, $749 for the 32GB version, and $849 for the 64GB version, Apple is making a healthy profit on each one they sell. This significant markup is a testament to Apple’s effective pricing strategy and brand value. The high profit margins also allow Apple to invest in future innovations and maintain its position as a market leader.
Apple’s pricing strategy is not just about covering the cost of manufacturing but also about positioning the iPhone as a premium product. The high price points reinforce the perception of the iPhone as a high-quality, desirable device, which in turn drives demand.
Component Costs and Technological Advancements
The teardown by IHS iSupply reveals interesting insights into the component costs of the iPhone 4S. For instance, the A5 processor, which is a significant upgrade from the iPhone 4’s A4 processor, is estimated to cost around $15. The Retina display, another standout feature, costs approximately $31. These components contribute to the overall performance and user experience of the iPhone 4S, making it a compelling upgrade for many users.
Moreover, the iPhone 4S introduced Siri, Apple’s voice-activated assistant, which was a groundbreaking feature at the time. The integration of such advanced technology further justifies the higher price point and adds to the overall value proposition of the device.
Have a look at our handy guide on the difference between the iPhone 4 and iPhone 4S. Apple has now announced the iPhone 5, have a look at our article on the difference between the iPhone 4S and iPhone 5 to see all about the new iPhone 5.
The iPhone 4S also saw improvements in camera technology, with an 8-megapixel sensor and advanced optics, which significantly enhanced photo and video quality. These advancements made the iPhone 4S a popular choice among photography enthusiasts and casual users alike.
Source All Things D, Apple Insider
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