The new iPhone X costs $ 115 more than iPhone 8, according to IHS Markit Inc. The more expensive OLED screen and the technology that enables face recognition are the main influences.
The total amount of materials for the iPhone 64-bit base with 64 GB of memory is $ 370.25. The bill, of course, does not include the cost of research and development, production and the operating system. The price of the iPhone 8 is $ 255.16. The display on the iPhone X costs the company $ 110 per share, compared to $ 52.50 for the iPhone’s 5.5-inch screen.
While the iPhone X costs the user more than the iPhone 8, analysts estimate that Apple earns almost the same amount of the two. The total bill for production is about 37% of the value of smartphones. The company declined to comment, and in 2015 CEO Tim Cook said these calculations were quite inaccurate.
FaceID, the new Face Detection Technology also contributes to higher costs. The parts cost $ 16.70 for each model – or three times more than those needed for TouchID.
iPhone X has further raised Apple’s smartphone pricing. This is the most expensive melaphone ever, considering the € 1,188 needed to buy the 64GB version, which is $ 1,359 for the 256GB. Very high figures but, according to a recent report, they seem to be partially justified by a sharp increase in production costs.
First of all, it should be stressed how the survey refers only to the costs of the production chain . Of course, items relating to staff, marketing, and distrubution were excluded, which inevitably can not be calculated as they represent the confidential information of the Cupertino company.
These estimates of the cost of production of the iPhone X are therefore partial , but represent an important indication, especially in comparison with previous generations, also because they originate directly from the decade-long melon production chain.
Made this premise, we go down in detail. The production cost of the 256 GB iPhone is estimated at $ 412.75, or 346 euros at the exchange rate. A figure that has an important impact on the 5.8-inch OLED screen produced by Samsung, which would have a unit price of $ 80 ($ 67.01) for Apple.
256GB NAND memory is produced by Toshiba , and it costs $ 45 for the Cupertino company (37.69 euros), while the 3 GB of RAM would have an impact of $ 24 (20.10 euros). Also worth mentioning is the 3D sensor of the front camera ($ 25, or 20.94 euros), the SoC A11 Bionic produced by TSMC ($ 26, 21.78 euros), the combination of front, rear and side metal frames ( $ 53, or € 44.39).
The various items of expenditure are of course much more, summarized in the table below. Yet another demonstration of how, in the production of a top smartphone smartphone, there are really many components to keep in mind, without forgetting the costs associated with marketing aspects . But that’s not all.
What is surprising is the difference compared to the production costs of the previous generations of melphonic. Using the same criteria, the production cost of the iPhone 7 base variant stands at $ 224.80 or 188 euros at the exchange rate, which becomes 157 euros for the base version of the iPhone 6s.
It is clear that in this case, the cost of production of iPhone X has been calculated in relation to the variant with the largest amount of internal memory. As we have seen, however, this component is certainly not so distinct from previous models.
Also important is the Galaxy S8 , whose production would cost Samsung $ 730, or 611 euros at the exchange rate. Against that hand, Apple would have a profit margin of 59% on iPhone X, but without considering all the other costs we mentioned in the premise.
It is virtually impossible to determine how effectively the Cupertino company gains from the sale of each iPhone X . There seems to be no doubt, however, about the sharp increase in production costs, which would have pushed Apple to place the new melafonino from 1.189 euros.
A situation that, according to a new report by KGI Securities , will also affect availability on the iPhone X market . Before the introduction of this device, rumors of any delays in marketing have been multiplied by the costs and the complexity of the production process.
It’s no coincidence that, unlike the new iPhone 8 and 8 Plus, the iPhone X preorder will only open on October 27 , with shipments starting on November 3rd. KGI Securities, prior to the keynote, was convinced that Apple would have dispatched 45-50 million units of the decade-old melaphone by the end of 2018.
With the report today, estimates have dropped to 40 million , with KGI being convinced that at least initially, the actually available iPhone X units will be few, in the order of 2 to 4 million here until the end of the year . Numbers that are likely to quickly sell out the smartphone during the pre-orders of October 27.
The feeling, however, is that the next generation of iPhone X, a bit like it did with MacBooks, could allow Apple to lower prices thanks to a greater production process optimization. The word now goes to the market, we will see what will be the welcome for this highly anticipated product.