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

[NT1440]

That may be an ESTIMATE of the parts cost, but how much is FOXCON charging Apple for every phone it builds? Apple doesn't build these phones - FOXCON does. THEY take the first chunk of this perceived profit. To that you add everything else- the loading and shipping to the docks, loading and shipping to the US. Unloading here, shipping to all the stores, unloading and warehousing and stocking the shelves, then you get to pay all the people in the stores and the rent electricity and taxes. Add all that up and see how much you have left. You will have a bunch for sure but it will be a lot less than the cost of the retail cost of the phone minus $443.

You’re also forgetting that Apple famously tools these assembly lines up with their own purchased equipment (they famously bought 20,000 CNC machines for the unibody MBP to be made which literally effected worldwide prices of those machines)...I’d love to see a yearly estimate of how much it costs to tape out and ramp up an entire Foxconn assembly line, then I dunno, include that in the costs?

 

[lJoSquaredl]

PC users will compare "I can just buy parts and do it myself" to just about everything Apple lol

 

[H.E. Pennypacker]

70% margin. Reason why they are a trillion dollar company.

 

[groadyho]

PC users will compare "I can just buy parts and do it myself" to just about everything Apple lol

That is a big plus PC has. The real joke is an out dated Mac costing what it does. Lol

 

[Ivabign]

Why not? iPhones are released every year and are different from the previous year.

Exactly. I was surprised to find a SIM tool in my XS today - how much did that cost? Kidding - but nice to see as none of my prior iPhones came with one and I hate using paper clips. How can I tell if it is liquidmetal?

 

[Seoras]

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

I deeply resent this attitude of "only paying for hardware".
As a professional software engineer I feel that this attitude devalues what I do for a living.

Your 7+ "works like a charm" sir because you continue to get FREE software updates.

Does anyone on that other platform enjoy those, and major OS updates, every year for 5 years? (iPhone 5S got iOS12)

 

[iPad Air]

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.

EXACT. We are paying them to do a ton of stuff...and in turn we get a great experience in my opinion.

 

[hugo7]

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.

- Yes, the IPhone XS has a ridiculously expensive starting price
- Yes, Apple is known to have crazy markups on various parts (e.g. going from 64B to 256GB storage)
- But, the comparison above (and chart from the article) is just disingenuous in not comparing like-for-like (i.e. plus size vs regular, 256 vs 64).

Whatever merit the article may have will get drowned out by the noise coming from that silly comparison chart.

 

[yaxomoxay]

70% margin. Reason why they are a trillion dollar company.

Uhm. No.

 

[zombierunner]

Spend more on the antenna

 

[shplock]

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.

So are you saying that poor old Apple makes no profits at all? In which case I wonder where that more than $250 billion cash reserves they have came from? A Christmas cracker? lol

 

[Bone Ranger]

Nice profit.

Have you ever run a business I wonder?

 

[NT1440]

Don’t get me wrong, it’s annoying on both ends. These reports, however, act like all this stuff is off the shelf parts.

The VCSEL component required for FaceID required Apple to drop $380 million on just getting production to the point where they could sell the X. Think about the capital investment needed to make that component at a quality and scale to move across 3 iPhones, and likely the upcoming iPads. Apple literally had to pay to build out factory capacity for these components to even exist at a scale big enough to put in a product that will move in 80+ million devices this year. THAT cost a **** ton of money, the capacity literally didn’t exist on the planet without the capital Apple splashed down on it.

 

[shplock]

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.

So are you saying that poor old Apple makes hardly any profits at all? In which case I wonder where that more than $250 billion cash reserves they have came from? A Christmas cracker? lol
[doublepost=1537914311][/doublepost]

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

Everyone suddenly is an armchair accounting expert! Those can not be included in cost teardown because it is impossible to value time. One hour might be worth $1000 to one person but might be worth $1 to another person. It depends on how each person decided how value their time is.

 

[admjhndly]

You all realize you're paying for engineering, parts, and software, right? All those Apple apps you use? Someone has to code and maintain them. Free software updates for then next few years? It is not a straight up $600/per iPhone profit. #businessschool #ScottsTots

 

[basehead617]

Personally I'm astonished at how LITTLE profit that implies.

 

[44267547]

I understand that. Just saying they make a lot of money off iPhones, which they do.

You’re right, they do. As long as Apple continues to offer excellent hardware standards, customer service and continued state of the art security methods, they can have my money for the iPhone. Its all about the experience, and Apple meets my expectations.

 

[shplock]

You might obviously enjoy spending all of your money on a single Apple product but some people feel they are ripped off by Apple rising prices each and every year on average. The iPhone XS Max can now cost as much as a decent specced laptop! You can even get a MacBook for the same money. What is next, next year, £2,000....£3,000...£10,000.

 

[alexnyc8]

Uhm. No.

The real reason why they are a trillion dollar company is the endless money being pumped by the Fed into the stock market. Rising tide floats all the boats. It will be interesting what will happen once the stock market crashes and cheap credit disappears. I doubt Apple will sell as much of anything if people have to shell out their hard earned (or saved) ca$h.

 

[admjhndly]

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.

this one gets it.

 

[NT1440]

You might obviously enjoy spending all of your money on a single Apple product but some people feel they are ripped off by Apple rising prices each and every year on average. The iPhone XS Max can now cost as much as a decent specced laptop! You can even get a MacBook for the same money. What is next, next year, £2,000....£3,000...£10,000.

...typing from an iPhone 6s....

 

[shplock]

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.

Sorry but all you arm chair experts do not understand that certain costs can not EVER be included in the price the iPhone is sold at! basic accounting 101. pLus the costs that are included are minimal when spread out over millions upon millions of phones. That is why it is called economies of scale!

 

[yaxomoxay]

The real reason why they are a trillion dollar company is the endless money being pumped by the Fed into the stock market. Rising tide floats all the boats. It will be interesting what will happen once the stock market crashes and cheap credit disappears. I doubt Apple will sell as much of anything if people have to shell out their hard earned (or saved) ca$h.

Well, in all fairness the fed is trying to make loans more expensive, although we are in a fairly high morale bubble that can bust any second. Political environment (Tariffs and such) are also probably helping (unintended or not) in maintaining some caution that otherwise wouldn’t be there.

 

[DNichter]

You’re right, they do. As long as Apple continues to offer excellent hardware standards, customer service and continued state of the art security methods, they can have my money for the iPhone. Its all about the experience, and Apple meets my expectations.

Absolutely. I’m a happy Apple customer myself. I don’t mind paying for the value that Apple brings to me. It’s just always wild to me seeing just how much money they make per unit.

 

[NT1440]

Sorry but all you arm chair experts do not understand that certain costs can not EVER be included in the price the iPhone is sold at! basic accounting 101. pLus the costs that are included are minimal when spread out over millions upon millions of phones. That is why it is called economies of scale!

Just a rough guess, how much would you say it costs to tool up a n assembly plant?