iPhone X Component Costs Estimated at $357.50

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

  1. farewelwilliams macrumors 65816

    Joined:
    Jun 18, 2014
    #226
    i tried the kinect. the latency was god awful and completely ruined the experience. i'm sure there's some R&D spent on improving the latency, especially when it's running on a battery powered device vs plugged in kinect.

    and i don't think Apple just bought Primesense and slapped FaceID on the tech and called it done. i'm guessing they needed to improve the tech a bit more to make it secure and not prone to spoofing.
    --- Post Merged, Nov 7, 2017 ---

    what? why per phone? i'm asking how much did it cost to develop the hardware design/software for FaceID. it wasn't a rhetorical question.
     
  2. MacsRuleOthersDrool macrumors 6502a

    Joined:
    Sep 8, 2016
    #227
    Not only that; but the massive number of Apple-branded chips inside the iPhone are ALL completely "black boxes" on the BOM as far as "cost" goes. So, 90% of the ICs in the iPhones are NOT amenable to ordinary "Cost Analysis".

    And a 3X margin over BOM Cost is not at ALL out-of-line. Doesn't anyone ever watch Shark Tank?
     
  3. Rum_Becker macrumors regular

    Joined:
    Sep 1, 2017
    Location:
    Canada
    #228

    Nope, the topic is on how much the components for the iPhone X cost. Did you not read the article, its states that the estimate is for material only, I see now you did not even read the OP and you are wasting my time.
     
  4. Michael Goff macrumors G4

    Michael Goff

    Joined:
    Jul 5, 2012
    #229
    You’re hilarious. My point is that numbers like this are both stupid and merely guesses.
     
  5. PickUrPoison macrumors 6502

    Joined:
    Sep 12, 2017
    Location:
    Sunnyvale, CA
    #230
    I know you’re joking, but for the haters...

    It’s paid for. Already. Twice over. Apple earned $10.7 billion (after taxes) in profit—in just the last quarter.

    Apple could have purchased 10 such campuses with the almost $50 billion (after taxes) they made in the last year.

    The new campus is an utterly brilliant move, and will serve Apple well for decades to come. But it’s not nearly enough space for them, they’re already developing a huge new complex in North San Jose. 4 million square feet of office space spread over 43 acres during the next 15 years.
     
  6. Rum_Becker macrumors regular

    Joined:
    Sep 1, 2017
    Location:
    Canada
    #231
    Of course they are estimates, it states that in the title of the thread. It's kinda like your estimate that retailers sell products for cost, the government does not tax Apple, and that Apple has 120K employees that work for free.
     
  7. Michael Goff macrumors G4

    Michael Goff

    Joined:
    Jul 5, 2012
    #232
    My estimates all deal with the costs relating to the devices under the iPhone name. That’s all. Why you being up taxes and employees as if they’re a part of the discussion is beyond me.

    I would think the people working for the Mac team are paid because Max’s sell, not because iPhones sell.
     
  8. vowell1055 macrumors newbie

    vowell1055

    Joined:
    Apr 21, 2011
    #233
    TOBY: The pills cost 'em four cents a unit to make.

    JOSH: You know that's not true. The second pill cost 'em four cents; the first pill cost 'em four hundred million dollars.
     
  9. masnick macrumors newbie

    Joined:
    Mar 3, 2010
    Location:
    Midwest
    #234
     
  10. MacsRuleOthersDrool macrumors 6502a

    Joined:
    Sep 8, 2016
    #235
    This is sarcasm, right?
    --- Post Merged, Nov 7, 2017 ---
    Why?

    Unlike most Extended Warranties, there is a high-probability that EVERYONE that gets AppleCare on an iPhone will eventually end up needing it due to "accidental damage".
    --- Post Merged, Nov 7, 2017 ---
    Remember, you said "GROSS" margin. That is NOWHERE near the "NET" margin.
    --- Post Merged, Nov 7, 2017 ---
    But even the cost of the Components is unknown when the majority of them are Custom, as in the iPhone, and you simply aren't privvy to the contracts between the Fab Houses and Apple.
    --- Post Merged, Nov 7, 2017 ---
    Sez you.
     
  11. MacWorld78 macrumors regular

    Joined:
    Jul 25, 2012
    #236
    Yes you are right, finding a loophole is a biggest challenge and take advantage while it last, obviously it's up to tax legal system to find all the loophole and patch it up.

    If big corporations refuse to give tax, who knows if government decide to increase more tax (%) from the public resource? we can't stop that can we or get away with it.
     
  12. UK-MacAddict macrumors regular

    Joined:
    May 11, 2010
    #237
    I never had any issues with the Kinect on my Xbox One. Obviously improvements have been made in the years since it was used on the Kinect but the core technology is the same.

    Im pretty sure that Kinect was able to recognise different people i.e. someone other than myself wouldn't be able to walk in front of the Kinect and sign into my account. So it had spoofing protection, maybe not as advanced as it is now in Face ID.

    Going back to the original discussion which was about R&D costs, my point was that the bulk of the R&D costs of developing the technology for Face ID wasn't present. The technology already existed and Apple just went about refining it and polishing it for Face ID. So Apples R&D costs would not be as high as it would be if they developed the whole technology from scratch.
     
  13. MacsRuleOthersDrool macrumors 6502a

    Joined:
    Sep 8, 2016
    #238
    And how many of those products and subassemblies had almost EXCLUSIVELY "Custom" parts?

    Sorry. The rules are VERY different when there is only ONE Customer for a particular Component; especially when that Component is something like a large-die SoC, employing the latest and greatest fabrication techniques.
    --- Post Merged, Nov 7, 2017 ---
    And do GROSS margins account for COGS?

    If not, you STILL don't have the SLIGHTEST CLUE what the NET margin is!
    --- Post Merged, Nov 7, 2017 ---
    Yeah, simple "refinements" like:

    1. Making it 1,000 smaller

    2. Making it work

    No. Easy-Peasy, right?

    You could have done it in your kitchen in an hour...

    :rolleyes:
     
  14. Jjayf macrumors regular

    Joined:
    May 31, 2015
    #239
    Actually 100%. We manufactured advanced composites for medical, military, high performance sports, and mass transit transportation and aerospace. We were single source design and manufacturing, inventory management, JIT delivery. The things you mention add to cost, not to margin.
     
  15. MacWorld78, Nov 7, 2017
    Last edited: Nov 7, 2017

    MacWorld78 macrumors regular

    Joined:
    Jul 25, 2012
    #240

    You decide what's fair play....

    supermarket 1: is selling a pear fruit for £3.00 per unit and another supermarket 2: is selling for 0.45 per unit? for your information both pear is 100% same.

    which one would you buy and why?
     
  16. MacsRuleOthersDrool macrumors 6502a

    Joined:
    Sep 8, 2016
    #241
    Did I imply they added to margin. If so, I apologize.

    And if you were doing things for a military/government/aerospace customer, then ALL the normal "costing" rules go RIGHT OUT THE WINDOW!!!

    Gimme a break!
    --- Post Merged, Nov 7, 2017 ---
    Not even.
     
  17. farewelwilliams macrumors 65816

    Joined:
    Jun 18, 2014
    #242
    i don't deny that it's certainly cheaper than doing it from scratch, but i don't think it was was simple as polishing and refining it. i'm guessing it's still a pretty big investment in making FaceID a reality. anyways, we're both guessing on this without any hard proof of the R&D costs.
     
  18. MacsRuleOthersDrool macrumors 6502a

    Joined:
    Sep 8, 2016
    #243
    And so, you think that that cost wasn't rolled-into the cost of FaceID R&D, which was eventually Rolled-into the cost of the iPhone X's R&D?

    And that purchase ALONE was a cool $360 Million. Yeah, that's "real money" to ANYONE. Even Apple.

    https://www.gamespot.com/articles/apple-buys-kinect-company-for-a-reported-360-million/1100-6416372/


    Money is money. Cost is Cost. And buying the company (and its Patents and Talent) only made it SLIGHTLY more possible to get done in a REASONABLE amount of time. It wasn't like they just put the Kinect-box stuff under a Shrink-Ray and VOILA!

    Gimme a break!
    --- Post Merged, Nov 7, 2017 ---
    There was a possibly apocryphal, but possibly not, story I heard about that when I was growing-up:

    The story goes like this: A train carrying many boxcars full of a high-end car (I think in the story it was Cadillacs. This was the 1960s, ok?) derailed, and all the cars were deemed destroyed.

    But rather than disclose the TRUE COST of the cars to the Insurance Co. (and potentially, the world), the manufacturer elected to "eat" the entire loss...
    --- Post Merged, Nov 7, 2017 ---
    Likely, the overall "Floor Plan" for the phone was "frozen" fairly early-on in the process, and besides, putting something as big and inductive and electrically-noisy as the Haptic Engine in the middle of the phone would:

    1. End up REDUCING the overall space for batteries.

    2. Perhaps mess-with (or BE messed-with) by the ALSO highly-inductive Qi Wireless Charging "secondary winding" that covers a good portion of the back of the phone.
    --- Post Merged, Nov 7, 2017 ---
    You really need a Sarcasm tag for that...
     
  19. Jjayf macrumors regular

    Joined:
    May 31, 2015
    #244
    Sorry if I confused you. The intent of my original post was to say that I wouldn't expect Apple to drastically change their margins from model to model, and because they are an exclusive buyer of components, they would be paying premium costs on their speciality items.

    As for my reply to you, yes, I can promise you that not a day in your life goes by without seeing a product I either had a hand in designing or manufactured. Take a transit bus? Many of the products on it were designed by our team. Drive on the freeway? You can't pass a delineator or marker that we didn't design. Deploy in the military? Our company designed and produced products that help keep personnel and civilians safe. Our products are on semi tractors, in airplanes, on jetfighters, snowmobiles, highway coaches, power generating windmills, noninvasive surgical equipment, and boats. All client exclusive and I priced them all.
     
  20. MacWorld78 macrumors regular

    Joined:
    Jul 25, 2012
    #245
    Yep I'm new to capitalism. :eek: Private ownership of capital enables firms to gain monopoly power in product and labour markets. Firms with monopoly power can exploit their position to charge higher prices.
     
  21. MacsRuleOthersDrool macrumors 6502a

    Joined:
    Sep 8, 2016
    #246
    So, using back-of-the-envelope (invert the profit to get costs), we have more like:

    $600-700 landed costs for a $1,000 iPhone X.

    That's probably a LITTLE high (because Apple probably makes a higher margin on Phones than, e.g., Macs); but I'll bet it isn't more than $100-150 "high". So that would be a MINIMUM of $600 - 150 = $450. MINIMUM.

    And it's actually probably more like $600, "all in" for the iPhone X. They do make some bank on the expanded memory versions; but not by leaps and bounds. Cost differential between the 64 GB and 256 GB model is probably around $60-75 for the extra Flash. Those high-density, high-capacity, fast Flash chips aren't exactly cheap, either.
    --- Post Merged, Nov 7, 2017 ---
    Retail price points.

    If Apple only offered a phone starting at $1k, they would be excoriated (and rightly so!). The models of iPhones being offered currently give people that even have as little as $350 to spend to get in on a 64-bit iPhone, and the iOS ecosystem.

    THAT's smart marketing.
    --- Post Merged, Nov 7, 2017 ---
    Well, that makes MUCH more sense, LOL!!!

    Interesting career, there!
    --- Post Merged, Nov 7, 2017 ---
    Someone rents a room from the iPhone?

    :)
     
  22. Gilligan's last elephant, Nov 7, 2017
    Last edited: Nov 7, 2017

    Gilligan's last elephant macrumors regular

    Joined:
    Aug 4, 2016
    #247
    What always gets me are people arguing that marketing/advertising costs are added to cost of the device. This is ridiculous. These costs add nothing to the device. They allow a company to sell more devices and increase profits. Any marketing should just be seen as a cost offset against increased sales.
    --- Post Merged, Nov 7, 2017 ---
    Because Apple overcharge and people are stupid enough to pay these excess prices. The accepted industry wide profit margin is much lower.
     
  23. Michael Goff macrumors G4

    Michael Goff

    Joined:
    Jul 5, 2012
    #248
    Accepted profit margin? Apple users are stupid? It turns out you’re speaking bollocks.
     
  24. MacsRuleOthersDrool macrumors 6502a

    Joined:
    Sep 8, 2016
    #249
    Ok, how about THIS for a reason:

    A VERY large portion of the components in the iPhone X are CUSTOM. Therefore, there is ABSOLUTELY NO WHERE TO LOOK for a "Cost".

    So, if 85% of the chips and other components in the iPhone X are Exclusively Apple's, then you simply have NO IDEA what the COSTS are for 85% of the BOM.

    How's THAT for a reason?
     
  25. Gilligan's last elephant macrumors regular

    Joined:
    Aug 4, 2016
    #250
    Clearly all the other vendors in the smartphone industry work on lower profit margins.
    When I see a company clearly milking profit margins I give them a wide berth.
    In the 80s/early 90s BMW prices in the UK once all the needed extras were added were excessive. They started including extras etc and lowered prices making them better value and I started buying them. The lower end 5 series were then competitive with the big Fords and they ended up being taken off the market. There are plenty of Apple users who say on this forum that they would pay whatever Apple charged. That is stupidity.
     

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