Apple's iPhone margins hit 58 percent, nearly double iPad's

The company posts gross margins of between 49 percent and 58 percent on U.S. iPhone sales, compared to 23 percent to 32 percent for its iPad, according to a court filing.

Don Reisinger
CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
Don Reisinger
2 min read

Although Apple's iPad stole the show in the company's latest earnings report, its iPhone is the breadwinner.

Between April 2010 and March 2012, Apple was able to secure gross margins of 49 percent to 58 percent on U.S. iPhone sales, according to Reuters, which obtained the data from court documents unsealed yesterday and filed in the U.S. District Court for the Northern District of California. Apple's iPad, on the other hand, generated gross margins of 23 percent to 32 percent between October 2010 and March 2012.

Apple does not provide gross margin figures on individual products, deciding instead to share it on a companywide level. However, the company has revealed many more details about its business in court filings, including how it generates such healthy profits.

It's worth noting that gross margins do not translate to the actual profit Apple generates off the sale of each device. Gross margin is simply the difference between the revenue Apple generates and the cost of the product. From there, other fixed and variable costs are added to the device's expenses to arrive at a final profit.

On a companywide scale, Apple's margins are similarly impressive. During the company's last-reported quarter, ended June 30, its gross margin came in at $15 billion, representing about 43 percent of its revenue. In other words, aside from iPhones and iPads, its margins across its entire product line appear to be quite high.

From there, Apple has been able to keep its costs down, providing for extremely high profits. Earlier this week, the company reported an $8.8 billion profit on its $35 billion in revenue. Both figures were up over the $28.6 billion in revenue and $7.3 billion profit Apple generated during the same period last year.

And as for those devices? Apple sold a record 17 million iPads during the last quarter, and a whopping 26 million iPhones.