Apple Makes $6 Billion By Dropping Chargers

Analysts estimate Apple has made more than $6 billion by no longer including chargers or earphones with new iPhones. It's a healthy bonus for what was sold as an environmentally-driven move.

Apple said its change in policy from 2020 was because many phone owners, particularly those who regularly get a new model, already had compatible chargers. Meanwhile many either already had plug-in earphones, preferred a wireless model, or didn't need earphones at all.

According to the Daily Mail, the environmental impact of reduced production was estimated by Apple as two million tons of carbon dioxide a year, equivalent to the emissions from 500,000 cars. (Source: dailymail.co.uk)

Now the newspaper has crunched the numbers on the financial savings given that Apple hasn't reduced the cost of new iPhones. The key is that Apple isn't simply saving the cost of manufacturing the chargers and earphones.

Shipping Costs Slashed

Because chargers are so bulky compared with the phone itself, Apple can get 70 percent more boxes on each shipping pallet. That works out at a 40 percent drop in shipping costs, something that's even more significant since the pandemic led to major supply chain problems.

The newspaper calculates that given Apple's worldwide sales, it is better off by $6.52 billion USD. It's also thought to have made a further $293 million USD from selling chargers and earphones separately as optional accessories.

On the other hand, that arguably proves Apple was correct in its move. Based on those figures, of 190 million people who bought an iPhone, fewer than 12 million bought either the charger or earphones from Apple. While some of those may have sourced one elsewhere, it's clear many didn't need them with the new phone.

No Price Drop

More cynical analysts will point to the fact Apple hasn't explicitly passed any of the cost savings on to customer by dropping the price of the new phones. (Source: phonearena.com)

However, it only works out as a couple of percent of the total price, so it's tough to know how it would affect sales. It may well be that Apple customers see iPhones as premium products where the precise price tag doesn't make much difference in their purchasing decision.

What's Your Opinion?

Do you buy Apple's argument that this is primarily an environmental policy? Does it matter that Apple seems to be getting most of the financial benefit? Would you be happy to buy a phone without a bundled charger?