Apple has a reputation for selling overpriced tech. While their products are quite nice, people often think that Apple stuffs in massive profit margins into each of their products. This is true for many of their meme products like their $1000 monitor stand and their $700 wheels, but in terms of consumer products, Apple is actually quite fair. If we analyze their quarterly report and normalize the numbers to the iPhone 13, we see that Apple only has a net margin of 20% or about $160. Now, are these super competitive margins in the single digits? Absolutely not. But, it's also not the crazy high 30-40% margins that many expect Apple to have. Moreover, most people don't buy iPhones for retail prices. They get it for $100 to $200 off by shopping for deals, going through their carrier, trading in their old phones, buying older generations, and so on and so forth. So, in terms of out-of-pocket cost that makes its way to Apple's pockets, for most people, it's well below $100 per iPhone. This video explains why Apple's consumer-level products are not overpriced, and why Apple's pricing is actually quite fair.
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Timestamps:
0:00 - Apple’s Profit Margin
1:26 - Cost Of iPhone
6:19 - Alternative Modes Of Monetization
7:57 - Higher Cost Of Business
9:41 - Overpriced Products Explained
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