I found this interesting piece on GigaOm and thought I’d share it with you. It doesn’t say how much money Apple is making off the iPhone though a quick math can give us a vague idea.

If it costs $180 to build an iPhone and Apple sells each unit to AT&T (or other carriers) at $550, then it makes a profit of $370 per unit sold.

$370 times 5.2 million iPhones sold in the third quarter of 2009 makes Apple a profit of $1,924,000,000 (for quarter 3 only). That’s almost 2 billion dollars in profits!!! To this, you have to subtract costs such as marketing, salaries, etc… but still, that’s a hell lot of money.

These are obviously rough numbers but they shouldn’t be too far from reality.

As you can see on the image below, it takes AT&T 2 years to make these $2 billion (in revenue, not profit). Apple is definitely cashing in…

  • If the hard cost per unit is 180 I would say the total cost would be much higher. Apple is a large company with a lot of employees. If you include salaries, marketing, facilities, transportation, packaging, returns, warrantied phones, stolen phones (from Apple), tech support just for the iPhone, and all of the other things which go along with the iPhone then the price tag does not look too bad. Sure the numbers are large but you must consider the scale of business Apple is operating on. After all we are talking about a lot of phones being sold.

    What ticks me off about Apple and the money is releasing new product and not letting people know it is coming. I have bought a few iPhones since the first week they were released. A couple times they released new product just weeks after the purchase. I would have waited if i had known the new item was coming. Then again I guess that would not be good for their pockets.

  • Varun Nagwekar

    Hats off to Apple and Steve Jobs. Amazing! This is how you really make a great product and sell it and make profit!

  • M.

    Hey, usually I’m just lurking around your Blog(Good job, btw!) and reading your posts, but this one caught my attention, so I just decided to comment…

    I knew that in Europe, carriers got the iPhones at about 300 euro a piece(iirc), which would be 450 bucks, this number makes me seriously doubt the price tag of 550 bucks. That’s way too much.

  • Polemicist

    I really enjoyed that. 🙂

  • I agree, Varun… what an amazing product! And you know, we are what we are in the USA and this society because of capitalism, innovation and creativity… so why not? Why not make tons of money for a world-class product like iPhone and the Apps that it runs. I am -never- not amazed by this device… every time I pick it up, I feel like I have power in my hand.

    I have a new blog as well on the iPhone – can you help me out? Looking for some Comments or please feel free to send me a Post! Visit us at http://www.iphone-weekly.com…thanks!!

  • iPhone 3GS

    @509 Media

    You make it sound as if Apple updates their products every few weeks. They usually go months before refreshing a product line – or in the case of the iPhone, once a year. Is it Apple’s fault you waited months to purchase their product? Maybe you should do some research before buying. Apple has a very predictable update/refresh pattern. iPods always update in Sept. iPhone updates in June/July. Macs are usually about 7 months from last refresh. MacRumors actually has a pretty decent buyer’s guide that keeps track of the refreshes and lets you know if it is a good time to buy or if you should wait.

  • Dylan

    i agree with iPone 3GS

  • vai la bobo

    You forgot the one who is probably making as much money with the iPhone..

    Government via direct and indirect taxation hahahaha !

  • Apple and AT&T are giant company and their product iphone will make big difference.