What Are Apple Inc (AAPL)’s Profit Margins on iPhone 6 and Apple Watch?


What are Apple Inc. (NASDAQ:AAPL)’s profit margins on iPhone 6 and Apple Watch? Apple Inc. (NASDAQ:AAPL) delivered on expectations of launching amazing new devices yet again, but whether or not these devices will be as profitable as earlier ones, is what interests investors the most. The company has received an amazing response for the iPhone 6 with over 4 million phones getting pre-ordered in the first 24 hours. The Apple Watch will be making its retail debut in early-2015 and has been priced at $349. The largest chunk of Apple Inc. (NASDAQ:AAPL)’s revenues comes from its gadgets which includes the iPhone, iPad, iPod and others; hence the company’s profitability is directly dependent on the sales of its gadgets. David Garrity from GVA Research was recently on CNBC to discuss about the new devices launched by Apple Inc. (NASDAQ:AAPL) and how profitable they will be for the company.

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“Obviously the dollars per unit are probably going to go up, given the fact that the fully loaded iPhone 6 Plus with a 128GB is going to cost you about $1,000. So, dollars per unit, probably still shows a nice rise versus the iPhone 5. Margins I think will probably stay flat until we get production curve efficiencies, which will help them prove margin further up,” Garrity said.

Garrity feels that when the new iPhones go for sale on September 19, Apple Inc. (NASDAQ:AAPL) will at least ensure that the stores have them for display purposes, even if the company can’t fulfill the overwhelming demand for the phones. He highlighted the fact that Apple Inc. (NASDAQ:AAPL) refrained from naming China as one of the countries in which the new iphones would be available on September 19, although China was among the 11 countries in which the iPhone 5 was introduced for the first time, last year. He feels that the launch of Apple Watch next year at a competitive price of $349 will also ensure that more iPhones get sold as the watch can be used only if it is paired with an iPhone.

As of June 30, 2014, Carl Icahn’s Icahn Capital owns over 52 million shares of Apple Inc. (NASDAQ:AAPL).

Disclosure: None

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