Apple’s iPhone 5 Pre-Sale Sells Out and that Means Money in the Bank for Apple

Tim Bean

9/14/2012

The New iPhone 5

Well, today is the official pre-order day for Apple’s iPhone 5, and well, sorry, if you haven’t already reserved yours it is too late, because the pre-order sale has sold out.  It is because of this demand that Foxconn, the Chinese company that manufactures these technological jewels, took the, um, “unusual” (immoral?) steps of getting nearby universities to suspend classes and then the universities “offered” mandatory internships (if there is such a thing) to their students to visit the factory and “assist” Foxconn in meeting the needed number of iPhone 5’s to meet this demand.  Those students, and their internships, appear to be doing the trick, because there are no expected delays in in shipping the new iPhone to fill these sold-out pre-orders.

So, with all of those pre-sales, this is certainly money in Apple’s bank, but just how much money?  I mean no business is going to sell their product – especially their crowned jewel of profitability – at a loss.  Well according to the estimates from TechInsights, it costs Apple around $168 dollars to make each iPhone 5, which I admit is more than I thought it did; given all of those mandatory interns.  So, simple math tells us that depending on which version you pre-bought ($199-$399), then Apple is making between $32 – $231 dollars on each unit.  $32 dollars doesn’t seem like a lot, but that is basing the profits off of what it cost you.  The actual retail price for this new toy is about $650, and even though you may have only paid $199, that is because you also signed a 2 year contract with a wireless provider.  The wireless provider is subsidizing your cost through that contract; they (the wireless provider) still had to pay Apple the full $650 for the phone, so when you consider this, Apple’s profit per unit is actually about $480; which is not too shabby.

Maybe they can roll some of those profits into at least buying those kind mandatory interns’ books; once they are allowed to return to classes that is.

And now for some humor at iPhone users’expense; courtesy of Jimmy Kimmel