Apple Maybe Making More Profit Selling One Mac Than HP Does From 7 PCs
By on June 25th, 2011

Apple Logo

A new blog post by  high school student Matt Richman titled  “A Consequence of Losing the PC Wars” compares  Apple’s profit margin from the sale of Macs to HP’s sales of PCs. The numbers which are revealed are mind blowing.

According to the report,  Richman reports that  Apple accumulated  $4.976 billion in revenue from the sale of 3.76 million Macs during their previous quarter, giving a Mac an average selling price of $1,323.40. Richman then multiplied that number by a 28% gross margin for Mac sales from Jefferies & Co  to arrive at a profit of $370.55 per Mac sold.

A June 1st research note from Peter Misek of Jefferies & Company pegged Mac gross margins at 28%. Multiply $1,323.40 by .28 and Apple makes $370.55 for every Mac sold.

In comparison, HP’s PCs  brought in  $9.415 billion in revenue and returned a profit of $533 million last quarter. Hewlett Packard’s  operating margin, which doesn’t include  overhead costs, came in at 5.66%.

HP’s Personal Systems Group, the division at HP that sells PCs,  brought in$9.415 billion in revenue and turned a profit of $533 million last quarter. Their operating margin, which doesn’t factor in overhead costs, was 5.66%. If we assume they spent 1% of their $9.415 billion in revenue — $94.15 million — on operations, then their profit margin was 6.66%. But let’s give them the benefit of the doubt and make it 8%.

Richman says that  “If we assume they spent 1% of their $9.415 billion in revenue — $94.15 million — on operations, then their profit margin was 6.66%…But let’s give them the benefit of the doubt and make it 8%.”.

With an average selling price of $650 and a profit margin of 8 percent, HP would be making approximately $52 on the sale of each PC, translating to “Apple makes more money from the sale of one Mac than HP does from selling seven PCs.”

Tags: , ,
Author: Parth Dhebar
Parth Dhebar is a 18 year-old entrepreneur. He is the founder of Simple Reviews, a blog focused on reviewing iPhone and iPad applications. Parth is a recognized name in the industry, known for covering Apple news. He is an editor at Techie-Buzz covering news on Apple. You can follow him on Twitter @pdparticle.

Parth Dhebar has written and can be contacted at parth@techie-buzz.com.

Leave a Reply

Name (required)

Website (optional)

 
 
Copyright 2006-2012 Techie Buzz. All Rights Reserved. Our content may not be reproduced on other websites. Content Delivery by MaxCDN