500000 Iphones times $500ea = $250,000,000 -- So Why Is AAPL Down?

Quote from Ivanovich:

Isn't $500 the retail price? Apple doesn't get $500 a phone, rocket boy!
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Even at that though, Apple typically guns for margins of 20-25%... it's still going to be a great add to the bottom line. The question truly is whether or not this has been fully figured into the stock price.

Look at RIm.... we've seen a move from $175 to $213 or so in 2 days....

I think there's more room for apple to move...
 
Ok, 20-25% margins. Let's say it costs them $100 to make the phone (I'm sure this is a bit low). So they make $25 on each phone? Let's say $200, and then margin is $50. That's one-tenth the number quoted in the thread subject.
 
Quote from Ivanovich:

Ok, 20-25% margins. Let's say it costs them $100 to make the phone (I'm sure this is a bit low). So they make $25 on each phone? Let's say $200, and then margin is $50. That's one-tenth the number quoted in the thread subject.
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Depends how you look at it, I wasn't clear in what I was referring to as margins....

Apple tends to go for a total margin after all expenses of 20-25%, where other tech companies in the PC markets tended to aim for 8-10% (ie, dell, hp, etc)

In this case, after apple takes all costs into account, including marketing, sales, salaries, etc, it aims for around 20-25% profit....
 
Quote from jazzsax:

Depends how you look at it, I wasn't clear in what I was referring to as margins....

Apple tends to go for a total margin after all expenses of 20-25%, where other tech companies in the PC markets tended to aim for 8-10% (ie, dell, hp, etc)

In this case, after apple takes all costs into account, including marketing, sales, salaries, etc, it aims for around 20-25% profit....
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Ah, so what you mean is product contribution.

Still, it's about a 10th of the title.
 
Sell the news !!!

This was a stupid market for Apple in the first place and typical of a company with too much cash and forced to spend it.

Sell the heck out of it because it will blow up in their faces long term.
 
Quote from Ivanovich:

Ah, so what you mean is product contribution.

Still, it's about a 10th of the title.
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Depends how you want to look at it.

Technically "contribution margin" is the products contribution prior to overhead expenses....

What I meant to imply is that historically apple after all costs are factored in tries to aim for an overall margin of 20-25% on products, compared to the rest of the pc industry working with a lower margin. Shouldn't have used misleading terms.
 
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