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

sumo.do said:
Sure. But does your 'lot more' account for an approx 75% raw profit on cost of goods?
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We know Apple always gets around 30 to 40 percent margin. Every year some website claims the parts cost a third of the price of the phone. Every year a bunch of morons believe this and also ignore overhead and labor, and get all up in arms about the supposed outrageous profit.

Macrumors may as well go ahead and post next September’s post now. It’s going to be the same story.
 
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yaxomoxay said:
Probably. Personnel is the highest expense for any company and government agency. Cost of goods are a relatively minor expense.
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That statement applies to some companies (depends what they manufacturer and sell) and certainly government. But not 'any' company. It is well known that Apple makes a huge net (nothing else left over after net... ;)) profit on their devices and Macs. You can't tell me that Apple is just getting by. I am not saying it's wrong. They're a business. As I said, it's a nice profit.
 
i love that there is a signifcant population here who just don't want to know how much a product manufacturing cost is....

the article didn't imply Apple should sell iphone at manufacturing cost, or anything else...

It's almost if they like to be ignorant.
 
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dumoore said:
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.
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yeah, other companies don't have similar expenses. always great to see people justifying their greedy prices/policy - look at what they did e.g. with MBP - the price is just getting ridiculous if you want anything else than the base model. Always a screwup with storage, intentionally removed SD card reader with only purpose to don't allow people use any "cheap" storage and to force them to higher models etc. They don't only have high prices, but use not 100% ethical practices to get even more. Many don't mind to pay some extra, but this silly short-sighted strategy won't pay off in the long run.
 
alexnyc8 said:
Thats a strawman and has nothing to do with my argument. My argument was purely on 64 vs 128 base. And the reason Apple does it has nothing to do with what you posted above - the reason is simple greed and sheering the sheep which allow to be sheered :)
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Your reasoning gives the impression that you see them separately for profit margin. Apple - like any other company - reasoned with a bell/curve in mind, and with a very precise target of unit sold/profit for the XS generation. the 64GB is probably their low profit product, and the 128 is probably their highest profit product, with the 256/512 either higher or somewhere in between. If Apple reduces the price of the 128, the price of the 64 would grow; it woulnd’t stay the same. (And so on).
The three price points exist to let apple reach the target, with - of course - marketing in mind (that’s their job: sell what they assemble). I don’t see how any of this is surprising.
 
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kingofwale said:
i love that there is a signifcant population here who just don't want to know how much a product manufacturing cost is....

the article didn't imply Apple should sell iphone at manufacturing cost, or anything else...

It's almost if they like to be ignorant.
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They have to justify $1300 they just spent on a gadget (or worse over $100+ monthly for a phone for the next 2 years). Human nature is very interesting and people will always have a tendency to defend their actions, even when they are far from economically smart.
 
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These cost estimates are totally meaningless. Biggest issue is that they are simply attempting to measure the marginal cost of producing a particular component. For example, it says the cost of the A12 is $72. If accurate, this is simply the marginal cost of producing a single A12 chip. So does that mean that if Apple sells only 1000 phones then the total cost of the A12 to Apple was $72,000? What about R&D, development costs, etc? Ridiculous analysis, as usual...
 
alexnyc8 said:
Thats a strawman and has nothing to do with my argument. My argument was purely on 64 vs 128 base. And the reason Apple does it has nothing to do with what you posted above - the reason is simple greed and sheering the sheep which allow to be sheered :)
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They charge a huge premium for storage that’s for sure, I’m not arguing that, but for all we know they don’t make too much profit off a base iPhone XS and most of the profit comes from people buying a higher storage model. That may not be what’s happening but it also may be.
 
Er, did these components fall from the sky and magically form an iPhone? This is pretty complex technology (arguably an understatement), and devlopping it must have costed a bit more than the sum of the cost of it’s components! Then overhead, assembling, logistics, and marketing add to the bill. And admittedly, profit margins too.
 
Add to that an army of employees-data and servers centers- government taxes and regulations around the globe- patents to other companies- shipping and logistics nightmare- Apple stores distribution channels - customer service and the operating costs (rent, utility, insurance, bank charges.. etc). In any industry the cost of goods are always in most cases 30-45% of the actual retail price because you need to add another 30-40% other costs this leaves you with a profit margin of around 15-25%.
 
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Judging by Apples value either tjey make alot more than 20%, or the cost are less than reported considering they buy in bulk and use cheap labor or most of their profit comes from mark ups on accessories including storage options. Probably all of the above, either way it all leads to an over priced product.
 
yaxomoxay said:
Your reasoning gives the impression that you see them separately for profit margin. Apple - like any other company - reasoned with a bell/curve in mind, and with a very precise target of unit sold/profit for the XS generation. the 64GB is probably their low profit product, and the 128 is probably their highest profit product, with the 256/512 either higher or somewhere in between. If Apple reduces the price of the 128, the price of the 64 would grow; it woulnd’t stay the same. (And so on).
The three price points exist to let apple reach the target, with - of course - marketing in mind (that’s their job: sell what they assemble). I don’t see how any of this is surprising.
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All I really said is that Apple often behaves like a douche company with their actions, while saying how much they care about the customers with their words. But i will agree that the said customers are solely responsible for Apple behaving this way because they continue to shell out thousands for these things. I only wish cheap credit was not available and people had to pay full price out of pocket. Cheap credit raises prices for everyone in any business because people will buy things they really can not afford without credit
 
alexnyc8 said:
They have to justify $1300 they just spent on a gadget (or worse over $100+ monthly for a phone for the next 2 years). Human nature is very interesting and people will always have a tendency to defend their actions, even when they are far from economically smart.
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For you, gadget.
For me, fundamental tool for work, and a very important tool for my entire family.
 
alexnyc8 said:
All I really said is that Apple often behaves like a douche company with their actions, while saying how much they care about the customers with their words. But i will agree that the said customers are solely responsible for Apple behaving this way because they continue to shell out thousands for these things. I only wish cheap credit was not available and people had to pay full price out of pocket. Cheap credit raises prices for everyone in any business.
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Oh, I don’t argue that Apple behaves like douche. But people should stop trying to put ideals into companies (Apple, Nike, Chick-Fil-A, Starbucks etc.). They sell a product for a price, that’s it. I am not saving the world by buying any of the products sold by any of those companies (or boycotting them).
Unfortunately companies and their marketing teams noticed that they can sell “ideals”, so that’s why they pretend to care.
 
yaxomoxay said:
For you, gadget.
For me, fundamental tool for work, and a very important tool for my entire family.
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You and every other teen and tween on the block. :)
Seriously though, if people could truly afford the cost of these, i would have no issue. but people get into debt for these, then they default on it, then taxpayers bail them (well their banks really) out. Be it iphones, cars or real estate - personal responsibility is long gone
 
lewdvig said:
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.
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Do you think the r and d is $1000 per device for the max 512g?! You need to take into consideration they sell up to hundreds of millions of devices, in theory that lowers the percentage of costs per unit by quite a bit. The more they sell, the less of r & d per unit. As I said, they are not selling 1 or 2 millions, they are selling hundreds of millions every 1.5 years or so i believe. instead of going down, prices have gone up! And they even have their apologists to defend them!

And I never complain about prices, if it's something I like i'll buy it, but it's no secret Apple charges a pretty penny for their products compared to the competition.
 
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Apple tends to work to ~30% profit margin on devices, but it’s interesting to see the guesstimates on the hardware components.
 
alexnyc8 said:
You and every other teen and tween on the block. :)
Seriously though, if people could truly afford the cost of these, i would have no issue. but people get into debt for these, then they default on it, then taxpayers bail them (well their banks really) out. Be it iphones, cars or real estate - personal responsibility is long gone
Click to expand...

Oh, well... as a Dave Ramsey follower I won’t argue that!!!
 
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