Apple's iPhone Slaps Palm
Apple's (AAPL) iPhone already looks like a smashing success from a financial standpoint.
In the past week, with the device's launch still three months off, a few analysts have already raised their sales estimates.
Even industry skeptics think Apple's deft design hand, and consumers' growing allegiance to the iPod brand, will push the company past its target of 10 million iPhones sold over 18 months.
That's only a 1% sliver of a market now topping 1 billion mobile phones sold annually. But it's a pretty sweet slice when you consider that the phones will be selling at $500 to $600 apiece."I think they'll sell 10 million to 15 million in a year, and that's at least an additional $5 billion on their revenue line," says one Wall Street analyst who has no rating on Apple. That will be especially huge "if they get margins like RIM (RIMM)," he adds. Analysts say most phone makers get fairly modest markups above the cost of producing the phones. Manufacturers such as Motorola (MOT) and Nokia (NOK) get gross margins of 25% to 35% on the price they charge telcos for the phones. But if some cost estimates are correct, Apple will be shattering that barrier by commanding 100% markups on its iPhone. In January, tech manufacturing research shop iSuppli detailed the estimated cost of every chip component and the assembly expense for the iPhone. For example, 4-gigabyte memory: $35; 8-gigabyte memory: $70; display screen: $33.50; manufacturing: $15.50. The grand total is $246 for the 4-gig-memory model and $280 for the 8-gig unit, according to iSuppli. So how does Apple command such a huge premium?
Virtual Keyboard Screen
music player screen
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV