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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.

iphone-x-teardown.jpg
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.

Article Link: iPhone X Component Costs Estimated at $357.50
 
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dmx

macrumors 6502a
Oct 25, 2008
701
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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.
 

Act3

macrumors 68020
Sep 26, 2014
2,233
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so what does that gross margin come out to? They'd still make a killing if they sold the X for same price as the 8+
 

robeddie

Suspended
Jul 21, 2003
1,777
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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.

KGI may be telling you what the RETAIL price of the display would be, not what Apple pays for it.
 

JetLaw

Cancelled
Jan 21, 2009
246
750
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.
 

lordofthereef

macrumors G5
Nov 29, 2011
13,018
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Boston, MA
So the research and development and all that used to justify the cost of the phone, fine. I get it.

So what about the continually rising costs of Apple care. Out of warranty replacements? Just... why?
 
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iFan

macrumors regular
Jan 3, 2007
244
707
Apple's internal cost estimates typically include marketing/logistics/packaging etc and tend to be about $50-$100 higher than analyst estimates at launch. Over the course of the following 6-9 months, the costs will come down to what these "predictions" were. The biggest unknown are also royalty payments to companies like Qualcomm, Nokia, and others. I'd probably add $200 to this cost estimate for my own personal guess.

Apple also takes out $X per device to cover future AppleCare costs.

Either way, it still a very profitable business! Apple used to tell store genius staff that it would take THREE full replacement devices before it cost the company any money.
 
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kildraik

macrumors 6502a
May 7, 2006
893
1,171
I bet 90% of those who comment will not read the last two paragraphs. Don't forget salaries, bonuses, bills, etc. Countless things to consider in cost analysis of a technological unicorn.

Also, component costs are low. Everything here is estimated, and that should not be ignored.
 
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