China's mainland, where contractors put together Apple's blockbuster smartphones, earns a mere 1.8 percent profit margin on its iPhone assembly business, a tiny fraction of the 50 percent gross margin Apple earns on sales of the devices, a new research says, the Beijing Times reported Monday.

Apple turned a significantly bigger profit on each smartphone in 2010 than the previous year, with a gross profit margin of 58.5 percent on its iPhone, according to the report by researchers at the University of California and Syracuse University.

Parts suppliers earned 21.9 percent of the profits. South Korea, Apple's main supplier of screens and electronic components, achieved a margin of 4.7 percent, the report said.

European companies reported a 1.8 percent profit margin on Apple's smartphones, while Japanese and Taiwanese enterprises each pocketed 0.5 percent.

China's business press carried the story above on Monday.

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