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Anon describes apple's practices
(lemmy.world)
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this post was submitted on 07 Jul 2025
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Hardware margins are tiny. Most companies, including Apple, don’t make their money on hardware. They make almost all their money on ad revenue, data collection, and subscriptions.
Someone might get a new phone once every 1-2 years and make Apple ~$50-100 one time, if that, but they likely had to pay for an employee to sell it to you and for the store to be open for you to buy it.
Compare that to the nearly 100% profit on every digital service you pay for, such as Apple Music/TV.
I see it going one of three ways.
Not defending Apple or anything, but hardware is often the last place a modern tech company makes a profit.
Apple’s actually somewhat of an exception here. They actually make most of their profit from hardware, not services. In the first half of this year, Apple has made $167 billion in product sales, and $53 billion in services sales. Their cost of sales for products was $103 billion for products, and $13 billion for services. That gives $64 billion in profit from products and $40 billion in profit from services. So about 62% of Apple’s profit comes from product sales.
Teardown reports of iPhones indicate that an iPhone 15 costs $423 to make but costs $799, giving a profit margin of about 47%. This doesn’t account for shipping though, so the actual margin will be a bit lower.
Apple profits source Teardown source
I stand corrected. You learn something new every day.
Now I wonder how directly their marketing and development budgets factor into their spending. They’re one of the few places with a brick and mortar store still and they push a lot of new stuff as fast as they can.