With a starting price of $999, the iPhone X may be Apple’s most expensive iPhone yet, but that doesn’t necessarily make it its most profitable.
In fact, according to a new report, Apple could actually make a smaller profit margin on the next-gen flagship phone than on previous handsets, due to the increased cost of components.
Gotta spend money to make money
The Wall Street Journal notes that the components for the new device stand at an estimated $581, significantly more than the $248 for the iPhone 7. The upshot is that, despite ramping up the price for the new iPhone, Apple may actually take home less from each handset sold.
With that being said, it’s worth noting that the numbers are based on analyst figures rather than anything actually released by Apple. As it has shown time and again, Apple’s great at driving hard bargains — which means that any figures are purely estimates.
Still, it’s interesting to hear, especially because the iPhone 8 and 8 Plus haven’t necessarily proven to be flying off the shelves at the speed of previous iPhones. Couple lowered interest in the iPhone 8 with shrinking profit margins (possibly) for the iPhone X, weakening demand in China, and possible lower-than-usual yield rates for the flagship device, and it could certainly have an impact on Apple.
Despite this, if the iPhone X can be the kind of hit many expect it to be, Apple’s massive cash pile certainly means that it can afford to take a short term hit if it means long term success.
Which new iPhone, if any, are you planning to buy? Leave your 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.
12 responses to “iPhone X may not be quite the money spinner you expect”
Neither and will not buy 6s , 6 or SE either. First off selling two , three or four year old phones is absurd. Secondly the 8/8+ are basically a less than S upgrade from 7/7+ and add a glass back making them heavier and twice as likely to crack.
The X is basically a Kinect sensor shrunk and uses pulsating lasers. Still has to see your face within a certain angle. Good for a Mac not as good for an X. Touch ID would have been a much better way to go and put that sensor package on the back so ARkit could do more. Bad decisions.
The UI of the X is unnecessarily hard, you must reach up to top right to grab control center. That requires two hands. Animojis is a gimmick. Staying with the 12MP camera from the 6 basically is another gimmick.
This is a 1600 dollar phone and they are still using 12MP form three years ago , oh they added OIS to second camera… that does not improve the photos. That camera bump is a bad idea and only reason people are not complaining is the Notch and the price.
Apple in last few years for higher prices has done stuff no one wants:
Remove Headphone
Touch Bar
Hump Case
Notch
Red Dot
Face ID
By buying these products you send a clear message that is OK… stop think. You current apple devices are basically the same as the new ones. Send a message.. NO Apple do better.
no one wants driod – that is what you don’t get.. no one wants an OS that is unprotected, an ecosystem that is the wild west of ransoms and hacks.. we apple users prefer sanity and stability, uniformity .. i for one appreciate that..
I wouldn’t say no one wants droid.. it’s pretty much the only other widely used OS… yes there are more than two but they aren’t even relevant.
you are correct – just those who don’t care about continuity and stability, security
That’s the reason why I carry a Lumia 950…has best 20MP Zeiss Camera too. Two years old. has OLED , has fast charge USBc (not $70 add on) has Wireless charge Qi (don’t use). IRIS Hello which is fine . Is not glass has Mozo leather back and no screen protector . Still going strong and just got build 1709. Paid 298.
and you came to an apple enthusiast website to cheer and pat yourself on the back? i am confused. isn’t there a driod site for that, that would care about your need to self gratify ?
I came to offer some perspective as an ex-apple user. Many here are confused over Apples current path and probably are searching for some options. I truly feel bad for Apple users so in my way trying to help. You may not like that I point out how things are but that does not change the fact they are that way does it?
Wow. You’re right FaceID should have started on the Mac line flbefore making its way down to the iPhones.. Apple fail big time here. Starting on the macs means it would have gained traction pretty quickly and gained trust.. after a year or two bring it to the iPhone with touch ID instead of making a whole bunch of sacrifices would have been much better.
The module is much too thick for any of the current Mac designs.
That would be what they want you to think but no it isn’t true at all. Wait until the teardown but its no thicker than the front camera they already have in the macbooks and the iMacs…
Studied this and the specs. Had an 6 and was time to upgrade on my at&t plan. Went with the 7+, cheaper than the 8+ and no glass back to crack. Spec difference didn’t impress me. I do take pictures but mostly for work so all the new “photoshop” features didn’t impress me. I’ve had the 7+ for a week now and am happy with the performance. Apple will work out the OLED production issues and in a couple of years, all of their phones (except low end target models) will be OLED and cheaper than the X is now.
Has apple ever lowered prices on top end? Ever?