This is the Normal Target for Apple

Apple has in recent years moved to achieve very high profit margins, why should the iPhone be any different.

In September 2005, the company iSuppli took apart an iPod Nano that retailed for $199, the cost to manufacture $98.18, 50% margin.

<http://www.appleinsider.com/article.php?id=1283>

An iPod shuffle costs approximately $59.00 for a $99 shuffle in February 2005 with dropping memory costs it was believed the price dropped around $8.00 pushing the margin close to 50%.

<http://www.pcworld.com/article/id,119799-page,1/article.html>

A review of the video iPod in September 2006 showed that the margin would be in the high 40% range.

<http://www.appleinsider.com/article.php?id=2052>

Apple shoots for a gross margin of 25-30 percent. To achieve this you have to have much higher overall margin and for Apple the target is 50%. So the iPhone will have a 50% margin.

I was once asked when will Apple lower a price, overall they don't anymore. What they do is increase the capability of a product, assign it a new SKU and keep the price the same. Not all the time but this is the basic philosophy of the company.