Apple charges $1099 for an iPhone 11 Pro Max, but the components for this high-end smartphone with assembly cost less than half the selling price.
TechInsights disassembled Apple’s latest flagship handset, identified each of its components, and estimated the cost of each one.
At $73.50, the most expensive component is the triple-lens camera that’s the highlight of this new mobile computer.
Next is the AMOLED display with touchscreen. TechInsights estimates this costs $66.50. That’s just ahead of the Apple A13 processor that supposedly is priced at $64.
Assembling these components, whether done by Foxconn in China or perhaps India, is $21.
And the iPhone 11 Pro Max production cost is…
TechInsights’ total for all the parts and manufacture for the iPhone 11 Pro Max is $490.50. That’s 45% of the amount Apple charges for this product.
That said, the remaining $608.50 isn’t pure profit. The bill of materials (BoM) doesn’t cover Apple employee salaries, advertising and other costs. Research and development on the hardware is not included. Also, the BoM doesn’t include software, and iPhone sales (with some help from iPad) must cover all the expenses for developing iOS and its bundled software.
Also, this market research firm did a teardown of the Samsung Galaxy S10+ and came up with a production cost of $420, while the list price for this model is $999.
Last year, TechInsights did the same study on the iPhone XS Max and found that the production cost was even lower, although that model had the same pricetag as the new 11 Pro Max. Clearly, each iPhone sold is adding considerably to the profits Apple regularly announces each quarter.