Consumers have to put down $1099 for an iPhone 14 Pro Max, but the hardware components for Apple’s top-of-the line smartphone cost less than half the selling price.
But don’t make the mistake of thinking the rest is pure profit.
Analysts reveal iPhone 14 Pro Max bill of materials (BoM)
There’s a lot that goes into an iPhone. Processors, cameras, the display and more. Apple doesn’t reveal how much these components cost, of course.
But Counterpoint Research disassembled Apple’s latest flagship handset, identified each of its components, and estimated the cost of each one. The result is called the bill of materials.
“The blended bill of materials (BoM) cost for the iPhone 14 Pro Max with 128GB Nand flash is about $464,” said Shenghao Bai, an analyst with the market-research firm.
That’s a 3.7% increase over the component cost of the 2021 iPhone 13 Pro Max.
iPhone components that cost the most
The two most expensive components in Apple’s top-tier handset are the 6.1-inch, always-on display and the Apple A16 processor — each accounts for roughly 20% of the total, according to Counterpoint Research’s analysis. The cost of the chip went up 6.7% year over year.
The components needed for cellular-wireless connectivity made up 13% of the total BoM. And the iPhone 14 Pro Max got a significant camera upgrade, and that increased the cost by $6.30.
The largest category is “Other,” which contains components like RAM, 128GB of storage, battery, the Taptic Engine, outer casing, frame and many more.
The rest isn’t profit
The components that go into the iPhone 14 Pro Max total up to 42% of the selling price, according to Counterpoint Research. That said, the remaining $636 isn’t pure profit.
The cost estimate doesn’t include the actually assembly of the handset in either China or India. Estimates for previous models put this around $20 to $30 per unit.
Plus, the bill of materials 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 — iPhone sales (with some help from iPad) must cover all the expenses for developing iOS and its bundled software.
That said, there’s definitely some profit. During the fourth quarter of 2022, Apple took in 48% of the revenue of entire smartphone market, and made 85% of the total profit, according to Counterpoint Research.
