iPhone 13 Pro Costs Around $20 More to Build Compared to the iPhone 12 Pro, Despite Being the Same Price for the Customer

[nikusak]

They make it sound like a bargain while the truth is that the iPhone, as good as it is, it's overpriced from the beginning.

Nope.

It’s impossible to overprice something like a smartphone.

It’s a fiercely competitive business and alternatives to the iPhone start at $100 or so.

Oh those cheap Android phones are not real alternatives? Well, clearly then there is added value in the iPhone.

Ps. iPhone is perfectly usable for half a decade, thanks to excellent software support from Apple. Just get the battery replaced once in a while.

It’s better value than pretty much anything else out there when you consider the longevity, as you should, of course.

 

[Jim Lahey]

They probably just ripped off another non-US market again to cover the costs.

 

[DevNull0]

It's $1400 in Canada = $1111 US. 13% tax is on top of that.

 

[TheGeneralist]

The build costs of a smartphone are not a constant.
Usually they start relatively high at the beginning of the product life cycle and end up relatively low at the end.

It seems to me that this fact has been ignored in the TechInsights Article.
Question is, what is really compared here - build costs at the same product lifecycle phase (which would be a kind of objective comparison) or build costs in October 2021 (which would not at all be objective)? In the latter case, the slight price "increase" would in fact mean decreased costs for the 13 Pro...

 

[laptech]

Apple will make sure they can recover the $20 increase. They will just increase the price of one of their other products.

 

[yabeweb]

Nope.

It’s impossible to overprice something like a smartphone.

It’s a fiercely competitive business and alternatives to the iPhone start at $100 or so.

Oh those cheap Android phones are not real alternatives? Well, clearly then there is added value in the iPhone.

Ps. iPhone is perfectly usable for half a decade, thanks to excellent software support from Apple. Just get the battery replaced once in a while.

It’s better value than pretty much anything else out there when you consider the longevity, as you should, of course.

My phone has been perfectly usable for the last "half-decade" (running it since 2017 Mi Mix 2 running current MIUI 12) but did not cost 1000euros, it plays music, it plays games, it runs the internet and so forth so on.

I used to have the latest iPhone, while there is some added value, it is definitely overpriced.

The fact that you justify the expense does not mean it's a fair price, I understand your point of view and I am in no way arguing that to you it's a valuable item, but still... it's an overpriced item.

BTW this is not an A vs B thread....

 

[bookofxero]

No it shouldn’t. The US doesn’t include tax in their advertised price like we do here in Aus.

I see a few people stating this here and I feel like it should be clarified: the US does not have a national sales tax. Tax rates vary by state - from 0% in some states to nearly 10% in others.
The way it is being presented by some makes it sound like an advertising ploy versus fundamental differences in tax structures and schemes.

 

[BvizioN]

Clearly the end-user price should go up by $20, since so many here have relentlessly insisted that Apple leaving out the charging brick means the end-user price has to come down by the price of the charging brick or else they’re getting ripped off. It works both ways, right?

Not in this universe, it doesn't. It only works in the way that suits the customers who just happen to be "always" right.

 

[chucker23n1]

The iPhone 13 Pro costs Apple around $20 more to build compared to last year's iPhone 12 Pro, but despite the lower margin of revenue for the company, the iPhone 13 Pro still starts at the same $999 price point as last year's entry-level Pro iPhone.

"Despite the margin being lower, the margin is lower"?

If the price point were higher, the margin wouldn't be lower.

That is one wildly misleading chart.

 

[chucker23n1]

I see a few people stating this here and I feel like it should be clarified: the US does not have a national sales tax. Tax rates vary by state - from 0% in some states to nearly 10% in others.

Doesn't change that the US is unusual in that its advertised price does not include sales tax.

The way it is being presented by some makes it sound like an advertising ploy

Well, it doesn't really make much of a difference since everyone in the country knows there's an additional cost.

But, when comparing across countries, it's misleading to ignore sales tax.

 

[joecomo]

The build costs of a smartphone are not a constant.
Usually they start relatively high at the beginning of the product life cycle and end up relatively low at the end.

It seems to me that this fact has been ignored in the TechInsights Article.
Question is, what is really compared here - build costs at the same product lifecycle phase (which would be a kind of objective comparison) or build costs in October 2021 (which would not at all be objective)? In the latter case, the slight price "increase" would in fact mean decreased costs for the 13 Pro...

that would actually interesting info to share in the article. I am not sure whether a large part of the cost is variable, probably a lot of the component pricing is predetermined - but would be interesting to learn more ...

 

[UK-MacAddict]

But everyone on the internet tells me iPhones are overpriced....

Look at samsung s21+ its costs $508 to build but retailed for $999 when it came out

The iPhone 13 Pro costs $570 to build but retailed at $999

who's overpriced samsung or apple??

The world makes you believe its Apple.

Both are over priced. Apple started the $1000+ trend and Samsung saw the opportunity to copy.

 

[citysnaps]

It's all about GPM, which is driven by Wall Street expectations. Apple tries to hit around 38-40%. It's currently around 41%, likely due to negotiating better prices from suppliers over the previous 1-2 years.

Keeping customer prices the same while incurring slightly greater costs for the 13 should help get margins where Apple wants it, in the 38-40% range like before.

 

[iDento]

Pricing a product has nothing to do with manufacturing cost. It’s all about perceived value, and supply and demand for sure.

 

[citysnaps]

Pricing a product has nothing to do with manufacturing cost. It’s all about perceived value, and supply and demand for sure.

It has a lot to do with manufacturing cost as that drives margin expectations.

 

[Berti10]

But the regular iPhone 13 got bumped up to 128GB, the Pro not nor did the price change. Now you know why

 

[svish]

Glad that Apple did not increase prices this year. Hopefully Apple will not increase it next year with the supposed redesign coming with iPhone 14

 

[Jim Lahey]

Apple will make sure they can recover the $20 increase. They will just increase the price of one of their other products.

Like making their leather iPhone cases out of recycled ice cream tubs and charging more.

 

[kawalerzysta]

$999 plus tax, in the USA. In Europe, VAT is quoted in the base price, yes?

Yes it is. In Pennsylvania we have 6% tax so iPhone 13Pro price that you pay is not $999, but $1058.94. Other places with higher sales taxe within US will have even higher price. All of those people who are crying that that prices are higher are sometimes are full of it. As mentioned before their prices include sales tax already baked in and don't take into consideration exchange rate. To have fair comparison between USA and other countries we need to compare pretax price in given country to US price.

 

[kawalerzysta]

That is insane. who is charging that extra money?

After conversion that Australian price is about $1250 USD and it includes taxes, so it is not that outrageous.

 

[falkon-engine]

$20.00 more expensive to build, simultaneously with no 20.00 usb-c charger in the box. Coincidence? Apple says it did so for the environment, but which environment? Their bank account environment?

 

[djlythium]

Lower profit-margin helps more consumers.

This is the way.

 

[Steve121178]

$20 is just a guess. No one knows the costs apart from Apple and their suppliers.

 

[Shirasaki]

Well given the increased memory footprint of all these new formats - Apple should get that money back easily on the iCloud/Storage side

Apple already covered that minuscule manufacturing cost “increase” from somewhere else already.

 

[Daydaym20]

Us don’t advertise tax.

I’m in the US and our taxes for the phone is still not that much…This is for the IPhone 13 Pro Max..