Apple swallows iPhone 13 Pro’s higher production cost

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The iPhone 13 Pro is as powerful as it is beautiful.
The iPhone 13 Pro cost much more to produce than a similar model from two years ago.
Photo: Apple

About 60% of the price of an iPhone 13 Pro goes into producing it, according to a analysts’ estimate. That figure comes from examining the cost of each component in Apple’s new high-end smartphone. It’s much more than Apple used have to pay.

And note that the rest of the selling price isn’t pure profit.

iPhone 13 Pro build cost is up

The iPhone 13 Pro sells for $999. TechInsights estimates that it costs Apple $570 to produce the device, so there’s a $429 difference.

This year’s cost is $22.50 higher than its estimated iPhone 12 Pro build cost. “The increased total cost is due to the higher estimated costs for the A15 processor, NAND memory, the display subsystem price, and an increase in the main enclosure cost,” the analysis firm wrote in a blog post.

But the increase wasn’t as big as last year’s. TechInsights estimated the iPhone 11 Pro Max build cost was $490.50. That was less than half the selling price.

Apple hasn’t passed the additional costs on to consumers. The iPhone 13 Pro, iPhone 12 Pro and iPhone 11 Pro all debuted at $999.

Not pure profit

The $429 difference between this year’s selling price and the production cost isn’t pure profit. The build cost doesn’t cover Apple employee salaries, advertising and other expenses. Research and development on the hardware is not included.

Also, TechInsights’ estimate doesn’t include software — iPhone sales (with some help from iPad) must cover all the costs of developing iOS and its bundled applications.

For comparison, the analysts estimate the Samsung Galaxy S21+ 5G costs $508 to produce. It debuted at $999 but very quickly dropped to much less.