[dr2005]

In light of the usual distribution model for phones, I would expect the vast majority of iPhone 5s were sold as part of a contract rather than SIM-free for pay-as-you-go purposes (simple reason being, someone for whom PAYG is more viable than contract isn't likely to have $650 to splash out on a phone). As such, the actual average margin per phone is likely to be far lower than the headline figure. It's also worth noting that in addition to the costs already stated, you'll also have import duties as the products are made outside of the United States (doesn't matter if they're Apple or not, they're made by a third party) as well as any local or federal sales taxes and advertising overheads, all of which will reduce the margin Apple makes per phone. The main reasons for Apple's high market value and net worth are (1) it's been saving up cash reserves for decades and (2) it engages in some pretty creative (and legal) tax avoidance schemes using a variety of tax havens. If it were as easy as bumping up the ticket price of their products, every smartphone manufacturer would be doing it.