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 â€” $94.15 million â€” 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 â€” $94.15 million â€” 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.”