More good news for Apple Inc. (NASDAQ:AAPL). A recent Market Watch story titled “The Most Profitable Products In America” listed the iPhone as number one. Despite the fact the Cupertino-based tech giant’s shares have tumbled and their margins are squeezed, the company is still churning the most profits thanks to their beloved smartphone.
Other companies that made the list include Marlboro, Monster Beverage Corp (NASDAQ:MNST), The Coca-Cola Company (NYSE:KO), Enfamil, Folgers, and Garmin Ltd. (NASDAQ:GRMN).
Profitability Due to Carrier Subsidizing the Apple iPhone
According to Market Watch, the iPhone has an operating margin of 40 percent, revenue of $80.5 billion, and a market share of 20.9 percent. They further explained the reasoning, “The iPhone is by far the most successful product Apple Inc. (NASDAQ:AAPL) sells Of the company’s $156.5 billion in worldwide sales in 2012, $80.5 billion came from the iPhone alone. Apple Inc. (NASDAQ:AAPL) sold more than 125 million units last year, a 73 percent increase from 2011. In contrast, Apple sold 58.3 million iPads that year, generating just $32.4 billion in gross revenue. Each iPhone is far more profitable than each iPad, the company’s second best-selling product.
According to documents released as a result of the patent lawsuit between Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), Apple’s gross margins on the iPhone were between 49 percent and 58 percent from April 2010 to April 2012, nearly double that of the iPad. This is partly because of larger revenue due to carriers that subsidize the iPhone heavily—an average of $425 per unit according to a recent Stifel Nicolaus analysis. Because of this fact, 24/7 calculates the iPhone’s profit margin is 40 percent—even higher than the entire company’s 35.3 percent margin.”
Apple Inc. (NASDAQ:AAPL) has become a legend of some sorts since they introduced the iPhone and iPad. Other tech companies have been trying to create something similar to the iPhone but very few have been able to successfully sell a product that’s on the same level in terms of design, appearance, and overall experience. It’s hard to compete with the leader and for those that do (like Samsung), Apple Inc. (NASDAQ:AAPL) certainly takes notice and isn’t afraid to throw lawsuits their way.