iPhone 8’s pricier components nibble away at Apple’s margins

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What’s it like to have your startup bought by Apple? Stressful
Apple still makes a killing on its new handsets. But a bit less than before.
Photo illustration: Ste Smith/Cult of Mac

Each iPhone 8 costs Apple approximately $288.08 to build, while iPhone 8 Plus handsets cost an estimated $295.44, according to a new breakdown by IHS Markit. On top of this, Apple pays around $7.36 in basic manufacturing costs per device.

The new handsets are slightly more expensive than Apple’s previous generation of iPhones, with the smaller iPhone 8 costing around $9.57 in components more than the iPhone 7 did upon release.

iPhone 8 breakdown
An estimate of how iPhone 8 components break down.
Photo: IHS Markit

While it’s difficult to pinpoint one particular feature that’s responsible for the hike in prices, two of the rationales for the added costs are the increased NAND flash memory content and new wireless charging components. As a way of compensating for the extra cost, Apple has increased its price for the 4.7-inch iPhone 8 by $50, while the 5.5-inch iPhone 8 Plus costs an extra $30.

So far, the iPhone 8 and iPhone 8 Plus have fared so-so with customers and critics. Reviews for the device described a phone that is superior to last year’s iPhone 7, but perhaps not worth splashing the cash for with the iPhone X on the horizon. Early sales were meanwhile disappointing, with one report placing the new handsets as Apple’s weakest September launch for an iPhone in years. (Although the iPhone 8 Plus may have done surprisingly well.)

The iPhone X, meanwhile, ships in early November, with a $1,000+ price tag. However, it is possible that the plethora of new, top of the range components on the iPhone X may actually earn Apple less money than previous handsets.

Finally, it should be noted that, in all of these cases, no-one apart from Apple’s manufacturers and Apple have access to the exact costs involved here, so these figures may not be 100 percent accurate.

Which new iPhone, if any, are you planning to buy? Leave your comments below.

Via: iClarified

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