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iPhone Makes up to $30 for Each Dollar Apple Pays its Chinese Workers, Report Says

Last year Apple achieved just under 10% of global handset sales while taking over 50% of the profits; a new report from Asymco analyst Horaţiu Dediu reveals to some extent how the company managed to accumulate such a massive fortune from the iPhone's success.

Apparently, Apple may bring in as much as $30 for each dollar the company pays the workers who slave away making its iPhones, PC Mag reports.

Horaţiu Dediu estimated that an iPhone makes about $650 in revenue. For Apple the gross margin on an iPhone is about 55%, making around $350 per unit, the analyst deduces. In order to make one iPhone Apple spends roughly $300.

Looking at the manufacturing costs he came to the conclusion that an iPhone is more costly than similar devices due to its complexity, the design and the quality testing needed.

"The iPhone manufacturing costs are likely to be twice or three times the average," points out the analyst from Asymco.

Labour costs for an iPhone are about 2% to 5% of the sale price, which ranges between $12.5 and $30. An exclusive report by US news show Nightline revealed that iPhone's are made almost entirely by hand.

Horaţiu Dediu used information revealed by the Nightline report, aired earlier this week by ABC, which investigated the life of Chinese workers in Foxconn factories and detailed things such as their daily pay, hours, working conditions and the work they did.

Radu has been working as a freelance writer for more than five years and has been blogging around since 2004. He is interested in anything Apple as well as gaming and mobile applications.