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iPhone X Component Costs Estimated at $357.50
Apple's new iPhone X costs $357.50 to make, according to estimates sourced from TechInsights and shared today by Reuters. At an estimated $357.50 to produce with a price tag of $999, the iPhone X has a gross margin of 64 percent, higher than the iPhone 8's gross margin of 59 percent.
Several of the components in the iPhone X are more expensive than their iPhone 8 counterparts, according to TechInsights. The 5.8-inch edge-to-edge display, for example, costs an estimated $65.50, compared to $36 for the 4.7-inch display of the iPhone 8.
Image via iFixit
The stainless steel chassis of the iPhone X costs an estimated $36, a significant premium over the $21.50 Apple shells out for the iPhone 8.
Following the launch of the iPhone 8, estimates suggested its raw component cost came in at $247.51, with the cost for the iPhone 8 Plus estimated at $288.08. Those estimates were sourced from IHS iMarkit, a research firm, while today's come from TechInsights, a company that does device teardowns and analysis.
Component cost estimates from companies like TechInsights and IHS look only at the price of raw components and do not take into account other iPhone manufacturing expenses like research and development, software creation, advertising, and distribution. While interesting, these estimates are not an accurate measurement of Apple's profit margin for the iPhone X, nor are they an accurate picture of the overall cost of creating the device.
According to Apple CEO Tim Cook, cost breakdowns are generally "much different than the reality." "I've never seen one that is anywhere close to being accurate," he said in 2015.
Several of the components in the iPhone X are more expensive than their iPhone 8 counterparts, according to TechInsights. The 5.8-inch edge-to-edge display, for example, costs an estimated $65.50, compared to $36 for the 4.7-inch display of the iPhone 8.
The stainless steel chassis of the iPhone X costs an estimated $36, a significant premium over the $21.50 Apple shells out for the iPhone 8.
Following the launch of the iPhone 8, estimates suggested its raw component cost came in at $247.51, with the cost for the iPhone 8 Plus estimated at $288.08. Those estimates were sourced from IHS iMarkit, a research firm, while today's come from TechInsights, a company that does device teardowns and analysis.
Component cost estimates from companies like TechInsights and IHS look only at the price of raw components and do not take into account other iPhone manufacturing expenses like research and development, software creation, advertising, and distribution. While interesting, these estimates are not an accurate measurement of Apple's profit margin for the iPhone X, nor are they an accurate picture of the overall cost of creating the device.
According to Apple CEO Tim Cook, cost breakdowns are generally "much different than the reality." "I've never seen one that is anywhere close to being accurate," he said in 2015.
[ 279 comments ]
Top Rated Comments
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28 months ago
This is a garbage analysis. They estimate the display to cost $65. We know that is wrong, as KGI (who is essentially perfect) estimates it at $120 - $130. Given the quality of the display, I would lean toward KGI being correct - we should disregard TechInsights entire analysis.
28 months ago
This really is nonsense. These devices are not constructed from Legos. The aggregate cost of the “bricks” only accounts for the variable costs of production. The fixed costs of production (R&D, marketing costs, etc.) are substantial and also dynamic. The media really sucks when it comes to headlines -and maybe we are to blame for being so succepible to falling for clickbait. There is value in the content of this article, namely, the cost of the physical components of this device, but to suggest an equivalency between that and what it costs to truly bring one of these devices to market is an insult to the intellegnce of us all.
28 months ago
I don't understand why they couldn't sell it for $359
Because they don’t grow from trees
28 months ago
I like how people will quote these estimates like gospel and will question the retail price. They seem to forget R&D, shipping of parts, final assembly and delivery to retail. These are all costs that need to be considered.
28 months ago
This is crazy - Apple used "secret bolthole" in Jersey to avoid taxes via Panorama paradise papers but expect us to pay even more?
28 months ago
wonder how much the R&D was for the FaceID
It's basically a Microsoft Kinect miniaturised, so not much research needed.
28 months ago
These costing are literal bear minimum.
As the articles says
Marketing/adverting
Wages - designers / Apple store / internal / helpdesk - many many others
R+D
Tooling
Taxes
Software
Are not included!
Double it at least and then you’re about right... $700 is probably correct. 30% profit is what most companies would love to achieve
And over the lifespan - the parts will get cheaper and profit increases.
I never get that EVERY year this BS post pops up without the RD estimates - they are guessing everything else so why not?
As the articles says
Marketing/adverting
Wages - designers / Apple store / internal / helpdesk - many many others
R+D
Tooling
Taxes
Software
Are not included!
Double it at least and then you’re about right... $700 is probably correct. 30% profit is what most companies would love to achieve
And over the lifespan - the parts will get cheaper and profit increases.
I never get that EVERY year this BS post pops up without the RD estimates - they are guessing everything else so why not?
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