It appears that Apple is making huge profit margins on United States iPhone sales according to figures revealed in a court filing yesterday. Apple never reveals its profit margins on any of its products individually, for obvious reasons, so this revelation spotted by Reuters makes interesting reading.
The main difference with the iPhone compared to the iPad is the cell phone contract and the subsidies that the networks pay to Apple for each handset. This obviously must account for a large proportion of the increased profit margin on iPhone models. Or, conversely, Apple is forced to lower margins on the iPad to get it under $500 for the base model, since there's no one subsidizing those sales.
It will be very interesting to see how the alleged iPad mini would fit into the profit margin percentage range. If Apple is willing to accept half the profit margin on current iPads as it does iPhones, how low could they go for a 7-inch iPad? iMore has previously heard $200 is the floor. If Apple is willing to take a short term drop in profit to ensure long term gains in market share, it certainly looks like there's room to blow the competition out of the water all together.
And most importantly, unlike Google with the Nexus 7 and Amazon with the Kindle Fire, which are sold roughly at or below cost, Apple might still make money off the sales.
Love them or hate them, these court cases with Samsung are starting to reveal some really interesting information.
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UK editor at iMore, mobile technology lover and air conditioning design engineer.