iPhone X Component Costs Estimated at $357.50

Discussion in 'MacRumors.com News Discussion' started by MacRumors, Nov 6, 2017.

  1. MacRumors macrumors bot


    Apr 12, 2001

    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.

    Article Link: iPhone X Component Costs Estimated at $357.50
  2. lilj4425 macrumors 6502a

    Apr 26, 2007
    Well, damn. Gotta pay for the new mothership I guess. :D
  3. farewelwilliams macrumors 68000

    Jun 18, 2014
  4. Goldfrapp macrumors 601


    Jul 31, 2005
    I don't understand why they couldn't sell it for $359
  5. hoon2999 macrumors regular

    Mar 30, 2012
    Still cannot justify ridiculous AppleCare pricing
  6. dmx macrumors 6502a

    Oct 25, 2008
    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.
  7. hoon2999 macrumors regular

    Mar 30, 2012
    Because they don’t grow from trees
  8. dannyyankou macrumors 604


    Mar 2, 2012
    Scarsdale, NY
    No surprise I guess. $60 more to make, but costs $200 more than the iPhone 8 plus.

    Keep in mind there's costs to R&D too.
  9. MacWorld78 macrumors 6502


    Jul 25, 2012
    This is crazy - Apple used "secret bolthole" in Jersey to avoid taxes via Panorama paradise papers but expect us to pay even more?
  10. Act3 macrumors 68000

    Sep 26, 2014
    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+
  11. robeddie Suspended


    Jul 21, 2003
    KGI may be telling you what the RETAIL price of the display would be, not what Apple pays for it.
  12. gixxerfool macrumors 6502a


    Jun 7, 2008
    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.
  13. sofila macrumors 6502a


    Jan 19, 2006
    Ramtop Mountains
    I find this estimates only interesting for a comparison of differences from year to year, i.e. iPhone 5s vs. iPhone 6s. But just for a 10 minutes lifespan.
  14. JetLaw macrumors member


    Jan 21, 2009
    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.
  15. tito2020 macrumors 6502a

    Oct 16, 2011
    dont forget sammy gets 200 bucks a screen as well
  16. WalterTizzano macrumors regular


    Mar 6, 2014
    It's basically a Microsoft Kinect miniaturised, so not much research needed.
  17. lordofthereef macrumors G5


    Nov 29, 2011
    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?
  18. iFan macrumors newbie

    Jan 3, 2007
    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.
  19. woogy12 macrumors member

    Jul 26, 2012
    Camas, WA
    Oh my gosh...a company is actually wanting to make a profit.
  20. mcfrazieriv macrumors 6502a


    Jan 30, 2012
    Irvine, CA
  21. lordofthereef macrumors G5


    Nov 29, 2011
    Boston, MA
    I figure the spent a few bucks miniaturizing something that, before this, was the size of a shoebox.

    Not justifying. Just saying that making things smaller, assuming that’s all they had to do, isn’t exactly free.
  22. kildraik macrumors 6502a


    May 7, 2006
    Colorado Rockies
    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.
  23. supercoolmanchu macrumors regular


    Mar 5, 2012
    Scandalous right? It's almost like Apple comparison shopped for favorable international tax rates... oh the horror! :rolleyes:
  24. bjaminkelley88 macrumors 6502


    Aug 24, 2016
    Dallas, Texas
    It's too ridiculous until you need it. It normally pays for itself with one incident.
  25. DNichter macrumors 604


    Apr 27, 2015
    Philadelphia, PA
    They’re a good business so no knocking that, but damn do they make a ton of money per unit. The markup is insane.

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