Apple scores big margins on iPhone 4S

Industry analysts UBM claim Apple will see big profit margins for the iPhone 4S in-line with the iPhone 4 launch

According to UBM TechInsights, a market research and intelligence company, the profit margins of the iPhone 4S are set to be substantial.

The intelligence and analysis company estimated the ‘bill-of-materials’ (BOM) of the iPhone 4S at $203, which it states is ‘in the same range’ as where the iPhone 4 was at its mid-2010 launch.

‘Using preliminary specs and cost analysis, we estimate the 32GB model of the iPhone 4S will have a BOM of $203 at launch. This estimate includes an estimated cost of $26 for the Apple A5 processor and $31 for the retina display,’ said UBM.

With the 32GB iPhone 4S set to retail for $749 on the US and Canadian market Apple islooking at a $546 profit margin. Admittedly there are other costs involved but UVM maintains Apple will still be making big profits despite these further expenses.

‘When taking into account current market prices, the iPhone 4S will achieve the same healthy profit margin that they have experienced in previous iPhone launches,’ the report said.

Translating things over here into pounds, shillings and pence, things are looking peachy as Apple is set to retail the 32GB iPhone 4S for £599. That $203 BOM converts into £131 giving Apple aprofit margin of £468.

UBM analysts explained that the release of a souped-up iPhone 4 is in-line with Apple’s historic business strategies despite much anticipation of a brand new iPhone 5.

‘Technology-wise, you aren’t seeing anything revolutionary or unexpected from the iPhone 4S,’ said Jeffrey Brown, vice-president of business intelligence.

‘As we predicted in July, the iPhone 4S is a moderate improvement over the iPhone 4 – featuring an A5 processor that has been in use for approximately nine months, an image sensor that puts the handset on par with its competitors, and improved battery life.’

UBM TechInsights vice-President of technical intelligence, David Carey added:

‘Just as we saw a modest technology bump from the iPhone 3G to the iPhone 3GS, Apple is adopting the same model of iterative improvement and incrementalism as they gear up for the iPhone 5 platform.’

‘The software experience – enabled by ‘good-enough’ hardware – is arguably what customers care about most in the end,’ Carey concluded.

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