Apple gets $30 for every dollar they pay their workers
Are you an Apple iPhone proud owner? Did you know that Apple actually earn a rough figure of about $30 for each dollar they paid to workers in China? According to Asymco analyst Horace Dediu, though Apple only acquired as much as 10% of the mobile phone worldwide sales in 2012 but it did bring home a staggering 50% of profits. So can this be?
Horace Dediu states,“An iPhone generates approximately $650 in revenue for Apple. This figure has remained fairly steady over time. Using deduction from overall margins, it’s possible to estimate the gross margin on the product to be around 55%.
The iPhone makes about $650 in revenue for Apple. Based on Dediu’s estimates, the gross margin of an iPhone is about 55% thus making around $350 while spending roughly $300 per unit. This is big profit for Apple at the expense of workers, especially factories in China.
Manufacturing cost of the iPhones is more complicated than other brands because of its complexity. Dediu stated,”The iPhone manufacturing costs are likely to be twice or three times the average.” Because the iPhones are almost entirely made by hand so labor costs are about 2% to 5% of the sale price which is about $12.50 to $30.00 of the $650.
Horace Dediu’s calculatuion is based on the Nightline report, aired earlier this week by ABC, which investigated the life of Chinese workers in Foxconn factories and detailed things such as their daily pay, hours, working conditions and the work they did.
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Apple gets $30 for every dollar they pay their workers
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