X-PASTER
JF-Expert Member
- Feb 12, 2007
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Sleek, in demand and most definitely expensive – but the cost of actually making an iPhone is more than £300 less than the retail price.
Labour costs
Of course, there are labour costs to manufacture this complex piece of kit, but recent investigations suggest that these expenses certainly do not bridge the gap between material costs and sale price.
Earlier this year, ABC's ‘Nightline' show went into the Chinese factories of Foxconn, where most of the world's Apple products - iPads, iPhones and Mac computers - are manufactured. The investigation revealed that workers earn just £1.12 an hour, work long hours and live in dorms with fellow employees.
Asymco analyst Horace Dediu used the ‘Nightline' report to estimate that Apple pays labour costs of between £7.86 and £18.56 for every iPhone it makes, which represents just 2-4% of the iPhone's sale price.
The ‘New York Times' has harshly criticised the labour practices of Apple's factories, and featured an interview with a former employee of Foxconn, who said: "Apple never cared about anything other than increasing product quality and decreasing production cost .... Workers' welfare has nothing to do with [Apple's] interests."
Profit
So if the materials cost roughly £118, and Dediu has calculated that an additional £58 is spent on manufacturing its smartphone, (a cost that includes the labour costs, transportation, storage and warranty expenses) we reach a total of about £176 to manufacture an iPhone that retails at £499. This represents a profit for Apple of £323 per iPhone.
Source: uk.finance | dailymail | geek.com
Labour costs
Of course, there are labour costs to manufacture this complex piece of kit, but recent investigations suggest that these expenses certainly do not bridge the gap between material costs and sale price.
Earlier this year, ABC's ‘Nightline' show went into the Chinese factories of Foxconn, where most of the world's Apple products - iPads, iPhones and Mac computers - are manufactured. The investigation revealed that workers earn just £1.12 an hour, work long hours and live in dorms with fellow employees.
Asymco analyst Horace Dediu used the ‘Nightline' report to estimate that Apple pays labour costs of between £7.86 and £18.56 for every iPhone it makes, which represents just 2-4% of the iPhone's sale price.
The ‘New York Times' has harshly criticised the labour practices of Apple's factories, and featured an interview with a former employee of Foxconn, who said: "Apple never cared about anything other than increasing product quality and decreasing production cost .... Workers' welfare has nothing to do with [Apple's] interests."
Profit
So if the materials cost roughly £118, and Dediu has calculated that an additional £58 is spent on manufacturing its smartphone, (a cost that includes the labour costs, transportation, storage and warranty expenses) we reach a total of about £176 to manufacture an iPhone that retails at £499. This represents a profit for Apple of £323 per iPhone.
Source: uk.finance | dailymail | geek.com
