> I know you want to believe that it costs Apple $559 to make that $600 phone, but it doesn't. Did you miss the part where i mentioned iPhone margins are over

> I know you want to believe that it costs Apple $559 to make that $600 phone, but it doesn't. Did you miss the part where i mentioned iPhone margins are over 50%? I know that margins over 50% means it costs apple less than $300 to make an iPhone, not $559. Or something in that ballpark. Margins are lower on the smallest iPhones and go up a great deal on the ones with higher capacity. Putting in a little more flash storage costs apple very little compared to the extra $100-200 they charge for it, the margins on that are much higher than on the base phone. All I was saying is that i think iPhone components and manufacturing labor genuinely do cost more than for iPad mini, and retina costs more than non-retina. Here are some rough guesses, I think they are in the right ballpark: >> 260 / (1 - 0.6) => 650.0 >> 230 / (1 - 0.33) => 343.283582089552 Maybe iPhone costs 260 to make and has 60% margins, and iPad mini costs 230 to make and has 33% margins. The results are in the right area for the average selling price of the devices. This would put the cost of materials $30 apart. If the retina screen costs an extra $15, it actually accounts for half the difference in component costs, it's significant. (higher margins are more significant, of course) Or maybe non-retina screens are $20, and retina are $30. Then the retina ones cost 50% more, that's significant (and still 1/3 of the component cost differences).