Apple (AAPL) may have become one of the most profitable companies ever this year, but that doesn’t mean it can keep up such a pace indefinitely. Forbes reports that Pacific Crest analyst Andy Hargreaves now projects that Apple’s gross margin on the iPhone will decline to 38.8% this quarter and will likely never top its peak margins of 40% ever again. The culprit here, writes Hargreaves, is that the “cost of goods sold for the iPhone 5” has increased from “to $370, from $353,” likely due to inputs such as an LTE radio and a higher-resolution display. And since competition from a flood of Android devices makes it unlikely that Apple will raise its prices anytime soon, it means that the company has likely seen the most profitable days of the iPhone pass.
Apple’s iPhone profits have ‘likely peaked’
Published Nov 26th, 2012 2:33PM EST
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Brad Reed has written about technology for over eight years at BGR.com and Network World. Prior to that, he wrote freelance stories for political publications such as AlterNet and the American Prospect. He has a Master's Degree in Business and Economics Journalism from Boston University.
