Business / By Gennaro Cuofano / February 5, 2024 February 6, 2024
It costs Apple $501 to make an iPhone 14 Pro Max, and the company sells it at a base price of $1099. This makes Apple’s base markup on the latest iPhone model at 119% Apple is the only tech company able to sell its tech products at such a premium, thanks to a combination of hardware, software, and marketplace.
The economics of Apple’s business model
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (2) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (2)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2024/01/how-does-apple-make-money.png?resize=1920%2C1448&ssl=1)
In 2022, the iPhone generated over $205 billion for Apple, making up over 52% of the company’s revenues. Apple employs a strategy called reverse razor and blade:
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (3) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (3)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2022/01/razor-blade-business-model.png?resize=1024%2C772&ssl=1)
Where in a razor and blade strategy, a company sells the main product at cost while making money on ancillary, consumable products, which generates a continuous stream of revenues.
Apple deploys the opposite strategy.
The iPhone is enhanced by an unlimited number of apps available on the App Store, which are mostly free and make the whole smartphone way more valuable.
Thus, enabling the company to place a premium on its iPhone.
This is the key!
Related to Apple
Who Owns Apple
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (4) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (4)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/10/who-owns-apple.png?resize=1920%2C1448&ssl=1)
Apple Business Model
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (5) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (5)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/06/apple-business-model.png?resize=1920%2C1448&ssl=1)
Apple Business Growth
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (6) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (6)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/06/Apples-Business-Growth-2019-2023.png?resize=1920%2C1448&ssl=1)
Apple Distribution
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (7) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (7)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2024/01/apple-distribution-strategy-1.png?resize=1920%2C1448&ssl=1)
Apple Value Proposition
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (8) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (8)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2022/05/apple-value-proposition.png?resize=1024%2C753&ssl=1)
How Much Is Apple Worth?
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (9) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (9)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/06/how-much-is-apple-worth.png?resize=1920%2C1448&ssl=1)
Apple Cash On Hand
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (10) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (10)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/02/apple-cash-on-hand-2.png?resize=1920%2C1448&ssl=1)
Apple Employees
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (11) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (11)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/06/Apple-Employees-Number.png?resize=1920%2C1426&ssl=1)
Apple Revenue Per Employee
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (12) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (12)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/06/Apple-Revenue-Per-Employee.png?resize=1920%2C1426&ssl=1)
Apple iPhone Sales
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (13) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (13)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/06/apple-iphone-sales.png?resize=1920%2C1448&ssl=1)
Apple Profits
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (14) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (14)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/06/Apple-profits.png?resize=1920%2C1448&ssl=1)
Revenue Per Employee
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (15) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (15)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/02/revenue-per-employee-2.png?resize=1024%2C760&ssl=1)
Apple Mission Statement
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (16) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (16)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2022/05/apple-mission-statement-vision-statement.png?resize=1024%2C753&ssl=1)
The Economics of The iPhone
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (17) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (17)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/06/how-much-profit-does-apple-make-per-iphone.png?resize=1920%2C1448&ssl=1)
Tim Cook’s Salary
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (18) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (18)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/08/tim-cook-salary.png?resize=1920%2C1448&ssl=1)
Tim Cook’s Net Worth
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (19) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (19)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2023/08/tim-cook-net-worth.png?resize=1920%2C1448&ssl=1)
Smartphone Market Share US
![How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (20) How Much Profit Does Apple Make Per iPhone? - FourWeekMBA (20)](https://i0.wp.com/i0.wp.com/fourweekmba.com/wp-content/uploads/2022/11/smartphone-market-share-us-1.png?resize=1920%2C1448&ssl=1)
Read next:
- Apple Business Model
- Apple Distribution Strategy
- The Apple-NeXT Deal
- A Decade-Long Evolution Of Apple Sales By Products
- Who Owns Apple?
- Apple vs. Google Business Models
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