iPhone X By the Numbers: Teardown Study Estimates Costs

As the iPhone X has made the biggest technological leap for Apple smartphones in several years, a new study has done the math to figure out just how much it costs to build.

The United Kingdom-based analytics company IHS Markit tore apart the iPhone X to examine how much each part costs. It concluded the overall cost to construct an iPhone X at 64 gigabytes was $370.25, the most expensive in iPhone history and $75 more than its most expensive predecessor, the iPhone 8 Plus with 256 gigabytes. When compared to its direct competitor, the Samsung Galaxy S8 with 64 gigabytes of memory, the iPhone X costs $68 more to construct.

IHS Markit has been deconstructing iPhones for several years now. In 2014, IHS calculated the cost of materials inside the 16-gigabyte iPhone 6 at just above $200.

While the $370.25 bill of materials is the highest seen on an iPhone, the cost does not even represent half of iPhone X’s $999 retail price. The iPhone X’s $628.75 difference between the retail price and bill of materials per unit is still higher than that of the $799 iPhone 8 Plus’s 64 gigabyte model and the $729 Samsung Galaxy S8.

These calculations are rudimentary and do not take into consideration engineering and research costs. Yet the increase in profit margins per unit for the iPhone X illustrates Apple’s vision of creating a lucrative premium iPhone in its steady march toward potentially becoming the first publicly traded company with a $1 trillion market capitalization.

“Typically, Apple utilizes a staggered pricing strategy between various models to give consumers a tradeoff between larger and smaller displays and standard and high-density storage,” said IHS Markit’s principal analyst for mobile devices, Wayne Lam. “With the iPhone X, however, Apple appears to have set an aspirational starting price that suggests its flagship…
Source: Mobile Tech Today

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