Apple's bite: For iPhone, uPay 100% markup

Think about this when you head to buy your $599 iPhone: It cost Apple half that amount to make it.
A study by corporate analysts found Apple's markup will be about 100% when it hits stores in June.

The $499 4GB model will actually cost only $245 to make, and the $599 8GB version can be manufactured for $280.

The high prices allow Apple wiggle room to push the cost down at some point, a move researchers at consulting firm iSuppli say is inevitable.

"They are setting themselves up for some aggressive price cuts, around the holiday season or just after, I expect," Jagdish Rebello, iSuppli's director of wireless service said.

"Apple has been doing this level of markup in other industries, but the question is whether they can do this in the cell phone industry - The answer is no. It's a brutal market where products have a very short life cycle."

Apple often releases new products with large ad campaigns, but the gap between Apple's costs and the prices paid by consumers will still be large.

Most high-end multimedia phones get about a 20% markup, and if Apple followed that, it would put the retail price of an 8GB iPhone at around $350.