Jeffrey Mincey simply destroys the typical iPhone profit model. The setup:
IHS Markit did a teardown of all the parts inside an iPhone 8 Plus, ran a few estimates on the cost of each component, visited a pharmacy to obtain a suppository, and then came out with a bill of materials cost of $288. That’s $288.08, to be precise. And, since iPhone 8 Plus retails at $799, the math means a profit of $510.92, to be precise.
Seems plausible, except…
That $511 must cover other expenses long before an official gross margin is arrived at by Apple’s gold cufflink clad bean counters. Other expenses that take a bite out of the $511 include design, engineering, manufacturing, distribution, operations, marketing, and many other facets of doing business in the 21st century.
The $511 profit per iPhone 8 Plus is rubbish. Complete rubbish.