The new iPhone X may retail for over $1,000, but according to a teardown by engineers at IHS Markit, the 64GB model costs Apple in the vicinity of just $370.25.
That’s around $50 more than the previous most expensive iPhone, the 256GB iPhone 8 Plus. Understandably, what makes the biggest difference in terms of components are the TrueDepth sensor and the Super Retina OLED display.
IHS Market estimates that the TrueDepth sensor cluster costs Apple around $16.70, while the display module — which includes the cover glass, AMOLED panel and Force Touch sensor — sets Apple back around $110.
The teardown also highlights just how many companies contribute to the creation of the iPhone, as can be seen by looking at the below chart revealing where the various components come from, and their estimated price per item:
Photo: IHS Markit
It’s worth noting that these are only estimates for the iPhone X components, of course. For one thing, prices can change as either processes are refined (thereby increasing yield rates) or Apple increases its orders. The exact price per unit is also known only to Apple and the suppliers, for competitive reasons.
The biggest thing to take into account, however, is the fact that the total bill of materials cost doesn’t take into account the time and money Apple has spent on R&D for the handset. Given that Apple spends upwards of $10 billion per year on research and development, it’s a mistake to think that the new iPhone is simply the sum of its component parts.
Have you bought the iPhone X? Let us know in the comments below.
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
7 responses to “iPhone X is a whole lot cheaper to make than it is to buy”
I call BS on this…nobody really knows what prices Apple is paying. As the article points out, it doesn’t take into effect the amount of R&D it takes to get something like this to market, marketing the phone, paying employees to sell the phone, assembling the phone and shipping it all around the world, etc. These articles are pointless and stupid IMO. All they do is spread FUD for people to fall for and they do it every time.
Another way to present an argument based on those numbers is that just a third part of the price tag is components and manufacturing, the other two parts you are paying is for:
-marketing and sales expenses,
-Intelectual property included brand, software, and Design,
-services that contribute to user experience and value
-customer support
Apple includes that for the price. That adds to the management and control expenses, plus corporate citizenship, legal, logistics, etc. and of course profit.
I say this because the cost analysis drives the classic argument “it just cost you $x and you want to charge $xxxx, that’s not fair and abusive.”
I still feel the iPhone is worth the ​price, the price is a significant part of a lot of people budget, but that’s a social and economics discussion, no an intrinsic value and price one
For that argument changing the model each year is not wise for most people. This situation is the same for a car. Nevertheless, car industry releases new models each year in the same incremental approach with time to time quantum leaps.
This estimate also fails to include component loss or failure. It has been reported that up to 50% of the displays failed during the ‘notch’ cutting for this phone. That doubles the cost of the screens for each phone sold as Apple must include the loss in their costs. Add to that the other costs Miguel listed and the phone is priced about right for the regular profit margins.
It costs what it costs. The most likely item to break is the screen, the most expensive component in the phone. Add the labor and you have an expensive repair bill. Not much Apple can do about that unless you expect them to take a loss on repairs to the phone YOU broke.
Look, I owned every iPhone since 3gs and never managed to break it. Never managed to even scratch it so I don’t much about it. But I that the repair cost should be a bit more reasonable if you already paid €1350 for new device.
Cheaper to purchase AppleCare+ and then you don’t really have to worry about it. Problem solved!
The only company that does cheaper research and development is SameSong with their copier.