Manufacturing Margins of iPhone 4S Achieve 70 Percent

Analyst Chris Whitmore, from Deutsche Bank, believes the material cost of 16GB iPhone 4S is just $170. This means iPhone 4S’ manufacturing margins achieved 70%.

On Monday, WHitmore write a letter to investors. He said that “This suggests manufacturing margins on the iPhone 4S are 71-73% (vs. ~38% for iPod touch) and should support attractive corporate margins for AAPL for multiple quarter”

Apple also get rich subsidies from its partners. It’s believed that Apple get $450 fof a 16GB iPhone 4S. Most of its competitors can get no more than $350.

These subsidies makes Apple iPhone 4S can offer a price of $199 with contract. But the price of Samsung Galaxy S II, Droid Bionic, HTC Thunderbolt are $229, $299 and $249.

Preorders for the iPhone 4S began on last Friday, with carrier AT&T announcing that day that it sold 200,000 handsets in the first 12 hours. That makes it the most successful iPhone launch ever for the carrier, which is the second largest in terms of subscribers in the U.S.

Whitmore also thinks that iPhone 4S will keep on Apple’s “smartphone gold standard”. This will ensure iPhone take the largest market share.