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"Do iPhone 4/4S sales actually result in significantly lower profits for Apple?"

Not lower profits, lower profit margins.

Edit: a really basic example that shows the difference in profit and profit margin is the calculation below.

(Profit Margins) X (Revenue) = Profits.

Check your math. If Apple made $100 on both a $400 item and an $800 item, the profit margin on the cheaper item would be twice that on the more expensive item.

There's nothing wrong with my math. It's still profit margin (25%) times revenue ($400) equals profit ($100). You're confusing a different concept with what I'm writing about.

25% x $400 = $100

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