Every sold iPhone brings Apple less money

Selling smartphones is the most important and profitable business for Apple today. Recent iPhone sales grew strongly for a long time they set the records until the market began to dictate its own conditions. However, with each sold iPhone over time, Apple began to earn less. Analysts believe that future profitability will fall even more.

In 2009, the Apple margin was 57.7%, if we talk about the iPhone. Now it is of 40.8%. Analysts at Bernstein Research believe that the future margin will fall below 40% and in 2018 will amount to 39%. It seems other analysts hold the same point of view.

Katy Huberty of Morgan Stanley believes that the margin will fall due to the fact that demand for the iPhone 7 has exceeded expectations. The company will have to expand production, which will lead to increased costs.

Steven Milanovich and Benjamin Wilson from UBS believe that the production of smartphones with large screens increases the cost, but Apple can not increase the cost. Moreover, they believe that in the future the difference in price between smartphones with screens of different size should be reduced. The price of the model with the prefix “Plus” should be close to the cost of conventional models.

Besides, analysts remind that we have not enough information about the cost of Apple iPhone warranty repair. As soon as this information becomes available, it will affect the calculation of margins. Recently, the company launched two of the repair program for the iPhone 6s and iPhone 6 Plus. They will not have much impact, but in the future may emerge new problems.

It is worth noting that many smartphone makers can only dream about 39% margin, the iPhone remains the most profitable smartphone.