iPhone XS Max Component Costs Estimated at $453 [Updated]

[MacRumors]

The iPhone XS Max with 256GB of storage costs an estimated $443 to make, according to estimates shared by TechInsights in a teardown of the new device. At $443, the iPhone XS Max components are nearly $50 more expensive than the estimated $395.44 component cost of the 64GB iPhone X.

TechInsight's component cost breakdown suggests the iPhone XS Max display is the most expensive component in the device at $80.50, while the A12 chip and modems are the second most expensive, at $72.

iPhone XS and iPhone XS Max internals, via iFixit​

Storage, priced at $64 is the third most expensive component, while other expensive parts include the cameras at $44 and the housing and mechanical components at $55.

The iPhone XS Max housing, display, battery, and memory are all more expensive than similar components in the iPhone X, largely due to the size increase in the new 6.5-inch device. The housing, for example, is larger and heavier, while the display is also larger.

According to TechInsights, Apple cut down on display cost in the iPhone XS Max by removing some 3D Touch components that were previously included in the iPhone X, but that does not appear to have affected 3D Touch functionality in the new iPhone XS Max.

In a statement provided to Reuters, Al Cowsky, who oversees the cost analysis at TechInsights, said Apple took out components worth up to $10, cutting the cost of the iPhone XS Max display to $80.

​

TechInsights' component cost estimates, click to enlarge​

Apple is charging $100 more for the iPhone XS Max than it did for the iPhone X, with the device priced starting at $1,099, while the iPhone X, like the new iPhone XS, started at $999.

Component cost estimates from companies like TechInsights only took at the pricing of raw components and do not take into account other iPhone manufacturing expenses like research and development, software creation, advertising, and distribution.

TechInsights itself warns that its cost estimates are compiled using the information available at the time of the initial teardown, with "some assumptions" made where concrete data is not yet available. The company plans to continue to refine its estimate over time.

Last year, when the iPhone X was first released, TechInsights estimated the component cost at $357.50, a number that has now gone up to an estimated $395.44, so there can be quite a bit of variance in these early guesses.

While interesting, device cost estimates are not an accurate measurement of Apple's overall profit margin for the iPhone XS Max, nor do they offer a clear picture of the overall cost of creating a new smartphone.

Back in 2015, Apple CEO Tim Cook said that cost breakdowns for devices are not reflective of actual costs. "I've never seen one that is anywhere close to being accurate," he said.

Update: According to TechInsights, its analysis of the iPhone XS Max parts was inaccurate because Apple has not removed any 3D Touch components from the iPhone's display. The estimated cost of the iPhone XS Max is now $453 rather than $443.

We have revised our initial estimates of the component cost of the iPhone Xs Max from $443.00 to $453.00, based on new information about the 3D touch system. Our initial review of the phone indicated that some of the 3D components that were included in last year's iPhone X had been removed, but further investigation revealed this not to be the case. We can confirm that the iPhone Xs Max includes the same Broadcom BCM15951 3D touch controller used in the iPhone X.

This increases the Display cost from $80.50 to $90.50, for a total cost of $453.00.

The title of the post has been updated to reflect TechInsights' new pricing estimate.


Article Link: iPhone XS Max Component Costs Estimated at $453 [Updated]

 

[alexnyc8]

Vote with your wallets people. If you go out and buy one on day one Apple will continue raising the prices.
The people here who attempt to justify Apple price increases are funny nevertheless. Yes Apple can charge whatever the market will bare (at least as long as there is 0% financing subsidy such as common in US), luckily for me though, my 7+ works like a charm (previous one was a 3GS) and i intend to keep it until it falls apart

 

[sumo.do]

Nice profit.

 

[DNichter]

Gotta love that markup. Wish I could get into a business like that.

 

[FelixDerKater]

But it has a logo.

 

[dumoore]

I love the people who just assume "$1200 phone - (cost of parts) = pure profit". Shipping, logistics, marketing, paying their engineers 6 figure salaries each, manufacturing, etc etc etc.

 

[TimUSCA]

Here we go with the armchair business experts telling us what an appropriate markup is and isn't. Just remember that there's a LOT more cost involved in making a device like this than just the materials used. Engineering, marketing, packaging, retail stores, etc. And yes... even a markup because they wouldn't be making phones at all without a profit.

 

[Polaroid]

Sorry this ESTIMATE doesn't include development time, wages, advertising, packaging, research time etc etc etc

 

[I7guy]

What components were removed? Were the functions of these components built into other components?

Other than that, I buy on value and price not price alone.

 

[bpeeps]

Gotta love that markup. Wish I could get into a business like that.

Are you implying Apple should sell the Max for $450 and not turn a profit from it as a for-profit-business? That $450 price-tag doesn't include employee pay, R&D, marketing, acquiring companies that benefit the iPhone UI, UX, and hardware.

 

[KrisLord]

R&D costs are not part of gross profit so they’re in the next section of the income statement.

Edit: I screwed up the numbers so have removed them...

 

[The Carny]

Interesting that 3D Touch components were removed on the XS Max. Rather than dumping it all together, could Apple be working towards fully replicating the functionality while reducing the amount of extra hardware required?

 

[Wiesenlooser]

Vote with your wallets people. If you go out and buy one on day one Apple will continue raising the prices.
The people here who attempt to justify Apple price increases are funny nevertheless. Yes Apple can charge whatever the market will bare (at least as long as there is 0% financing subsidy such as common in US), luckily for me though, my 7+ works like a charm (previous one was a 3GS) and i intend to keep it until it falls apart

You are right. Still this article is bogus. Apple does have an incredible margin but it’s not anywhere near where this article suggests it to be.

 

[Fattytail]

Gotta love that markup. Wish I could get into a business like that.

Apple's net margins are in the 20% range. Good, but not spectacular.

 

[bbednarz]

Vote with your wallets people. If you go out and buy one on day one Apple will continue raising the prices.
The people here who attempt to justify Apple price increases are funny nevertheless. Yes Apple can charge whatever the market will bare (at least as long as there is 0% financing subsidy such as common in US), luckily for me though, my 7+ works like a charm (previous one was a 3GS) and i intend to keep it until it falls apart

Good for you. I'll spend my money where I see fit. Thanks.

 

[alexnyc8]

Are you implying Apple should sell the Max for $450 and not turn a profit from it as a for-profit-business? That $450 price-tag doesn't include employee pay, R&D, marketing, acquiring companies that benefit the iPhone UI, UX, and hardware.

Apple can charge whatever they want - its their product. What they maybe *could* do is cut the BS and at least offer 128GB as the base storage model. That or stop saying they care about the customer (that goes to any corporation though but Apple especially since they always project an angel image of themselves)

 

[shareef777]

I love the people who just assume "$1200 phone - (cost of parts) = pure profit". Shipping, logistics, marketing, paying their engineers 6 figure salaries each, manufacturing, etc etc etc.

And how does any of those expenses change when bumping the memory from 64G to 512G and then marking the phone up $350! for memory that costs them an extra $100!? Nothing wrong with making a profit, but they need to stop acting like it's "all about the customer".

 

[lewdvig]

Yeah, I'd like these to factor R&D and marketing too. At least make an attempt at it. The simple-minded get worked up over these articles; and judging by current events that is a rapidly growing demo.

 

[Abstract]

So if the Xs MAX was 64GB like the XS, component cost would be $424 vs $395? The Max carries quite a premium over the Xs!!

Anyway, as others are saying, these approximations don’t account for the actual manufacturing costs, plus development, design, and testing, plus all ancillary costs required to run a business.

 

[lewdvig]

And how does any of those expenses change when bumping the memory from 64G to 512G and then marking the phone up $350! for memory that costs them an extra $100!? Nothing wrong with making a profit, but they need to stop acting like it's "all about the customer".

You are right, it doesn't. It does however put the rest into context.

 

[adamjackson]

While Tim's statement is accurate in that tear-downs do not equal actual costs, then add 30% and that's the cost. Apple still makes $300-$500 on every phone sold which is an amazing figure.

 

[cmaier]

Gotta love that markup. Wish I could get into a business like that.

Because overhead and engineering and labor are free.

 

[waquzy]

Sorry this ESTIMATE doesn't include development time, wages, advertising, packaging, research time etc etc etc

Finally someone who gets it

 

[DNichter]

Because overhead and engineering and labor are free.

Nope, not at all.
[doublepost=1537909950][/doublepost]

Apple's net margins are in the 20% range. Good, but not spectacular.

Where do you get that from?

 

[bpeeps]

Apple can charge whatever they want - its their product. What they maybe *could* do is cut the BS and at least offer 128GB as the base storage model. That or stop saying they care about the customer (that goes to any corporation though but Apple especially since they always project an angel image of themselves)

Apple can offer whatever storage sizes they want - it's their product.