iPhone 8 Component Costs Estimated to Start at $247.51

The iPhone 8 and iPhone 8 Plus are more expensive for Apple to manufacture than the iPhone 7 and iPhone 7 Plus, according to component cost estimates research firm IHS Markit shared today with Bloomberg.

An entry-level iPhone 8 with 64GB of storage costs Apple an estimated $247.51 in raw materials, an increase of almost $10 compared to the $237.94 it cost Apple to make last year's 32GB iPhone 7.

The 64GB iPhone 8 Plus costs an estimated $288.08, up from $270.88 for the iPhone 7 Plus.

Image from iFixit's recent iPhone 8 teardown

To compensate for the increased cost, Apple charges $699 for the 64GB iPhone 8 in the United States, up from the $649 starting price it charged for the 32GB iPhone 7 in 2016. The iPhone 8 Plus is priced starting at $799, up from $769 in 2016.

"The added value went to memory, camera, and processing. That's where we can materially identify where they've improved the overall product, and hence why they can command a higher price for it," according to Wayne Lam, an analyst at IHS.

According to Bloomberg, some of the most expensive components in the iPhone 8 and 8 Plus include the screens and the mechanical enclosures. Apple's new glass-bodied devices are built around a strong internal frame and include new displays with True Tone support.

Compared to iPhone 7 pricing, the wireless charging module increases costs by $2, the A11 Bionic chip costs $5 more, and the larger 256GB storage options increase prices by $6.

IHS's component costs are only estimates of what the iPhone 8 and the iPhone 8 Plus cost to manufacture, and sometimes those estimates are not spot on. For example, while IHS told Bloomberg cost $237.94 to manufacture an iPhone 7 in 2016, its initial estimates following the iPhone 7's release were at $219.80.

These estimates also only look at raw component costs and do not take into account other iPhone manufacturing expenses like research and development, software creation, advertising, and distribution, so this information, while interesting, is not an accurate measurement of Apple's profit margin for the iPhone 8 and the iPhone 8 Plus.

Back in 2015, Apple CEO Tim Cook said that cost breakdowns are generally "much different than the reality." "I've never seen one that is anywhere close to being accurate," he added.

Top Rated Comments

(View all)
Avatar
39 months ago

Always interesting that 7$ to 10$ on their end equals 200$ - 250$ on the consumer end.

These figures don't take into account R&D, Software, Assembly, Packaging, Shipping, Advertising, or Retail Store costs.
Score: 49 Votes (Like | Disagree)
Avatar
39 months ago
Always interesting that 7$ to 10$ on their end equals 200$ - 250$ on the consumer end.
Score: 26 Votes (Like | Disagree)
Avatar
39 months ago
Cost goes up $18 so Apple sticks it to their faithful for an extra $50.
Score: 19 Votes (Like | Disagree)
Avatar
39 months ago
There is also the ever dropping cost of innovation. Since everything now is minor improvements the overall cost of research and development is dropping. Then there is the 4 year old design. The cost of this device should have dropped.
Score: 15 Votes (Like | Disagree)
Avatar
39 months ago

These figures don't take into account R&D, Software, Assembly, Packaging, Shipping, Advertising, or Retail Store costs.

If Apple wasn't making record profits your point might be valid. Don't worry buddy, Apple are doing fine..
Score: 15 Votes (Like | Disagree)
Avatar
39 months ago
These cost breakdowns seem completely pointless to me. They don't include the cost to develop the processor, for example, which is probably the largest cost to create the new phone. Second largest is probably the development and testing of the OS, which also isn't included. And then the cost for the part manufacturing assumes quantity discounts in the millions of units, so it isn't like you could just somehow buy the parts and build one for this price.

Given that, I don't really see what this tells us. I guess the part manufacturing cost delta from last time? But, is that interesting to people?

Not arguing - I'm honestly curious. I think this every time they publish one of these. I'm sure someone wants to see it, I'm just not sure why.
Score: 7 Votes (Like | Disagree)

Top Stories

Here's How You Can Download iOS 14 and iPadOS 14 Around the World [It's Out]

Wednesday September 16, 2020 2:36 am PDT by
Apple's official public release of iOS 14 and iPadOS 14 dropped on Wednesday, September 16, just a day after the company released the Golden Master to third-party developers. Also set to be made available to the general public for the first time are watchOS 7 and tvOS 14. Getting Started With iOS 14 Video Click image to watch iOS 14 Getting Started While that's left a lot of developers...

When Will the iPhone 12 Launch? Here's What We Know

Wednesday September 16, 2020 6:12 am PDT by
Yesterday's "Time Flies" Apple event saw the release of the Apple Watch Series 6, Apple Watch SE, iPad 8, and iPad Air 4, but no new iPhone models. Rumors before the event strongly alleged that it would not see the unveiling of new iPhones, with many reports pointing to an October launch. The lack of new iPhone models yesterday seems to confirm that the iPhone 12 lineup will not appear...

Apple Releases iOS 14 and iPadOS 14 With Home Screen Redesign, App Library, Compact UI, Translate App, Scribble Support, App Clips, and More

Wednesday September 16, 2020 12:48 pm PDT by
Apple has released iOS 14 and iPadOS 14, the newest operating system updates designed for the iPhone and iPad. As with all of Apple's software updates, iOS 14 and iPadOS 14 can be downloaded for free. iOS 14 is available on the iPhone 6s and later, while iPadOS 14 is available on the iPad Air 2 and later. The updates are available on all eligible devices over-the-air in the Settings app. To ...

Apple Releases Safari 14 for Mac Ahead of macOS Big Sur Launch

Wednesday September 16, 2020 1:40 pm PDT by
macOS Big Sur didn't launch alongside iOS 14, iPadOS 14, tvOS 14, and watchOS 7 today, with the update coming later this fall, but Apple did release the Safari 14 update for macOS Catalina and macOS Mojave users. Safari 14 brings improved performance, customizable start pages, a Privacy Report to see which cross-site trackers are being blocked, and a new tab bar design that provides tab...

Apple Updates AirPods 2 and AirPods Pro Firmware to Version 3A283

Monday September 14, 2020 11:24 am PDT by
Apple today released new 3A283 firmware updates for the second-generation AirPods and the AirPods Pro. The second-generation AirPods are being updated from the 2D15 firmware they were previously running, while the AirPods Pros are being updated from the 2D27 firmware they had installed previously. Apple does not provide details on what's included in refreshed firmware so we don't know what's ...

iOS 14 Picture in Picture No Longer Working With YouTube's Mobile Website in Safari [Without Premium]

Friday September 18, 2020 12:21 pm PDT by
Apple in iOS 14 added Picture in Picture to the iPhone, a feature designed to let you watch a video in a small screen on your device while you continue to do other things on the phone. When Picture in Picture was working with YouTube The YouTube app doesn't support Picture in Picture, but up until yesterday there was a functional workaround that allowed videos from YouTube.com to be watched...

Hands-On With the New Apple Watch Series 6 and Apple Watch SE

Friday September 18, 2020 1:19 pm PDT by
Today's the official launch date for the Apple Watch Series 6 and the Apple Watch SE, both of which Apple announced on Tuesday. We picked up a couple of the new models and thought we'd give them a quick look for MacRumors readers thinking of ordering a new watch. Apple Watch Series 6 & Apple Watch SE Hands-On! When it comes to design, both the $399 Series 6 and the $279 SE look just like...

iOS 14.2 Beta Adds New Shazam Music Recognition Feature for Control Center

Thursday September 17, 2020 3:36 pm PDT by
Apple today released the first beta of iOS 14.2 to developers for testing purposes, and the new update introduces a Music Recognition control for the Control Center. The new feature lets you discover music playing around you and it recognizes the music playing with in apps, even when you're wearing AirPods. Songs pop up as notifications, and you can tap to listen in Apple Music....

8 Third-Party Home Screen Widgets That You Can Try Out Now on iOS 14

Wednesday August 5, 2020 12:56 pm PDT by
One of the biggest new features of iOS 14 is Home Screen widgets, which provide information from apps at a glance. The widgets can be pinned to the Home Screen in various spots and sizes, allowing for many different layouts. When the iOS 14 beta was first released in June, widgets were limited to Apple's own apps like Calendar and Weather, but several third-party developers have begun to test ...

Apple Releases watchOS 7 With New Watch Faces, Family Setup, Sleep Tracking, Handwashing Help and More

Wednesday September 16, 2020 12:47 pm PDT by
Apple today released watchOS 7, the newest version of the watchOS operating system designed to run on modern Apple Watch models. The watchOS 7 update comes after several months of beta testing. ‌watchOS 7‌ can be downloaded for free through the dedicated Apple Watch app on the iPhone by going to General > Software Update. To install the new software, the Apple Watch needs to have at...