An iPhone XS Max with 256GB of storage is yours for $1,249. But how much does it cost Apple to build?
Is it possible to take an iPhone XS Max, tear it down into its components, and then decipher from that how much that device that will cost you $1,249 actually costs Apple to make?
Well, you can certainly pull numbers out of the air, but how meaningful or accurate they are is open for debate.
The other day TechInsights carried out a teardown analysis of an iPhone XS Max with 256GB of storage, looked at every component, assigned it a price, and came to the conclusion that the component bill of materials (BOM) for the handset came to $443.
Problem is, it's a pretty meaningless number. For a number of reasons.
The first problem with it is that you can't just take the selling price, subtract the BOM and find out how much profit Apple makes from each sale. You can't even use it for gross margins because Apple doesn't break down R&D and other associated costs for specific devices in its line.
We can't forget that Apple also buys in huge volumes. Not only does that allow it to make deals to drive prices down, but it can also stockpile certain components it knows it will need when the prices are lowest.
As for more custom components, as volume and yields increase, prices will come down over time. What an iPhone costs to make in September of this year will likely be higher than what the same iPhone costs to make next year.
So while it's cool to get a number to play with, and fun to compare that to a number pulled out of the ether for last year's iPhone, it's important to keep in mind that only Apple really knows how much it costs to make an iPhone, and that figure changes hourly.
And based on that data, the gross margin for the iPhone likely stands at around 40 percent. Based on this figure, that $1,249 iPhone XS Max costs Apple in all (parts, labor, R&D, admin, and other associated costs) around $750.
Which means that a good chunk of that revenue -- some $500 -- is profit.
SOURCE ZDNet:
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