iPhone costs Apple $250? According to Apple Proxy Statement

[amx]

So I was going over the Apple Proxy statement from that was jsut released and noticed something interesting on page 22. Page lists all the executive compensation, damn those guys get a comfy salary.

"This amount represents the Company’s contributions to Mr. Cook’s account under its 401(k) plan in the amount of $13,500 and a tax gross-up in the amount of $250 for an iPhone given by the Company to each of its employees, including the named executive officers, other than Mr. Jobs. "

Just found that interesting.

Link to the statement. http://www.apple.com/investor/?sr=hotnews?sr=hotnews.rss

What do you guys think?

 

[mikes63737]

This has been known for a while - Apple has a flat-fee repair service for the iPhone, and it costs... shockingly... $250.

 

[JNB]

That's the monetary value Apple places on the iPhone for IRS/SEC purposes. They could have as easily said $1. Doesn't provide significant insight to the true cost, but is teasingly within reasonable range, thereby driving speculators (and more importantly, competitors) nuts. Don't read anything into it.

 

[CashGap]

So I was going over the Apple Proxy statement from that was jsut released and noticed something interesting on page 22. Page lists all the executive compensation, damn those guys get a comfy salary.

"This amount represents the Company’s contributions to Mr. Cook’s account under its 401(k) plan in the amount of $13,500 and a tax gross-up in the amount of $250 for an iPhone given by the Company to each of its employees, including the named executive officers, other than Mr. Jobs. "

Just found that interesting.

Link to the statement. http://www.apple.com/investor/?sr=hotnews?sr=hotnews.rss

What do you guys think?

The $250 tax gross-up represents his estimated personal income tax liability for the gift of an iPhone.

iPhone retail value at launch $599, given to him free, 30% ($200) federal tax liability estimate, 8% ($50) state and local tax liability estimate.

No insight into the cost of the iPhone in this statement. Rather, an estimate of income tax liability for a $600 gift.

Another example, I worked for a company that often gave away $50,000 cars as incentives for good work. Not a company car... a gift, titled to you. We'd do a $15,000 cash bonus to the employee to help offset the tax liability.