Thursday, October 29, 2009

The iPhone profit pie

Marketplace's Scott Tong had a great piece in yesterday's show about the chain of profits coming from Apple's iPhone.

Japanese, Korean, and Chinese companies pull in varying percentages of the profit from an iPhone by selling parts and, particularly in China's case, labor to Apple during the production of the phone.

The crux of the story is that, though many different companies across the world do much of the work to manufacture the iPhone, Apple still takes in an estimated half of the profit on every $300 iPhone, compared to, say, around $4 per phone for the Chinese companies who build them. From the transcript:

From China's perspective, here's the moral of the iPhone story: the dominant players in the global economy are the inventors and the brand owners: whether it's electronics, or cars, or clothing.
It's an important lesson! Intellectual Property is big money in the modern world, whether it's a patent for an innovative touch screen or a trendy Apple logo. Listen to the whole story here.

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