Re:OnePlus One – $299 CyanogenMod 'killer' smartphone
by ycaspirant on Monday April 28, 2014 @01:16PM
(#7661359)
Thanks for the clarification. I had actually never heard of this concept of ``unit margin,'' but it makes sense now. It's funny that I managed to go through an entire internship at a financial services firm (which included working with valuation models of AAPL) without ever encountering this concept. I guess it's no surprise that I didn't get offered a job at the end of the internship!
Unit margin is an important number to account for and work to maximize, basically because you assume that as the number of units you sell increase, your fixed costs become less and less relevant to your overall company profit. But unit margin is always higher than overall company profit margin.
EDIT: Also, obviously, unit margin varies by sku. The iPhone 5s and the iPad Air are probably the highest-margin items that Apple sells (some of their Macs may compete). Things like iPods and iPhone 5cs are likely lower-margin.