What is the markup on unsubsidized phones?

[scottfree]

I was just wondering what the markup is on unsubsidized phones? From what I understand is that the contract price is the real price of the phone. When you buy off contract you are just paying for the tax break they wouldn't get. Does anyone know more about this subject ? I have googled as well

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[harrellj]

I don't know exact numbers, but the difference in price between on and off contract has nothing to do with tax breaks. Off-contract price is the price of the phone, the MSRP.

Subsidizing a phone has 2 purposes. 1) Locking someone into a contract is guaranteed income. 2) People are.less inclined to pay $800 USD for a phone, but are more likely to pay for the same phone when it is $250.

Yeah, yeah.. I'm on my phone. So?

 

[scottfree]

The Actual Cost of A Smartphone « Mostly Tech looked this up its nearly a 70% profit

 

[scottfree]

looked this up its nearly a 70% profit same article but charts are more clear http://www.techxilla.com/2010/12/18/actual-cost-companies-spend-to-build-a-smart-phone-infographic/



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[scottfree]

Apple pays $187.50 for parts on Iphone 4 http://www.brighthand.com/default.asp?newsID=16775&news=Apple+iPhone+4+iOS+Compuntents+Parts+Cost

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[kodiak799]

Margins on the IPhone have been estimated at 30-35%. Yeah, cost is $187-$200, but that doesn't include marketing, R&D and distribution.

Consider most phone are sold on contract for $200 or so, but that includes @ $250 in subsidy. So $450 is roughly the price of the phone, and so @1/3 is profit making the total cost to Apple about $300.

Mark-up for retail is a different story, because now you have a 3rd party like Best Buy who has to tack-on a profit to the top. So Apple makes $150, but then BB is going to add another $150-$200 on top.

 

[scottfree]

Ya I was thinking add about $100 maybe for marketing and shipping etc. Could we buy the same parts and get ahold of a schematic and build the same phone ourselves?

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[takeshi]

Even if you could buy the parts you wouldn't get them for the same price that the manufacturers pay. You're buying a single part where the OEM's are buying many, many more.