It’s no secret that Apple makes a lot of money. In fact, it makes up a disproportionate amount of profit compared to all the other phone manufacturers. The image above shows how. Nokia’s latest and greatest Windows Phone running smartphone’s parts cost the Finnish giant around $209. The iPhone 4S’ parts compared look decidedly cheap, coming in at $190. But, when it comes to selling the devices to the public, Apple charges $649, making a huge $459 profit on one handset. The Lumia sells for $450, making $241.
There are many factors as to why and how the price points have been set this way. Firstly, the iPhone is produced in massive scale, meaning Apple can negotiate really good prices on all its parts. Cupertino has often – in the past – also hashed out exclusive deals for technology not seen on older devices. It has massive buying power, and companies will fall over themselves just to get an insignificant component placed on the iconic smartphone’s circuit boards. On the other hand, Nokia is nowhere near as popular as Apple in the smartphone market, and it’s running a platform which hasn’t yet been fully embraced by consumers. That means it produces fewer handsets, and pays more for components that Apple can get cheaper.
If Windows Phone and Nokia’s deal can improve the traction of both in the market, there’s no reason why the Lumia parts won’t be purchased at lower prices. As for now though, all most manufacturers can do is sit back and gawp in disbelief at how successful Apple is.