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iPhone 8 Plus costs more to make than any previous version of Apple's smartphone

By Shawn Knight · 7 replies
Sep 26, 2017
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  1. Apple’s new iPhone 8 Plus carries a bill of materials (BOM) cost that’s higher than any previous version of the iPhone according to a preliminary estimate from IHS Markit.

    In other words, it’s the most expensive iPhone to build to date (excluding the upcoming iPhone X).

    A teardown from the analytics firm estimates that an iPhone 8 Plus with 64GB of RAM costs roughly $288.08 in materials. After tacking on $7.36 for basic manufacturing, the total is pushed to $295.44 which is $17.78 higher than that of the iPhone 7 Plus.

    The smaller iPhone 8, meanwhile, carries an estimated BOM of $247.51, or $9.57 higher than the iPhone 7 when it was released.

    Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit, said that from a teardown perspective, the biggest cost adders for the iPhone 8 Plus would be the increased amount of RAM and the new wireless charging components.

    To help offset some of the added costs, Apple has increased the introductory price of its new iPhones. The iPhone 8 with 64GB of memory starts at $699 – that’s $50 more than the starting price for last year’s iPhone 7. The bigger Plus model commands at least $799, a premium of $30 compared to the cheapest iPhone 7 Plus at launch.

    Limited supply and heavy demand for NAND flash has been driving costs up all year.

    Lead image courtesy Sarah Tew, CNET

    Permalink to story.

     
  2. JaredTheDragon

    JaredTheDragon TS Guru Posts: 616   +394

    I feel really bad now for Apple. How are they supposed to hit their 600% markup target, with rising costs like this?
     
  3. Jaabaaar

    Jaabaaar TS Rookie Posts: 22   +9

    iPhones are cheap for what they are. They’re something magical and that’s not available with other phones.
     
  4. JaredTheDragon

    JaredTheDragon TS Guru Posts: 616   +394

    There's nothing magical about any technology. Are you the biggest shill on this entire site, or just being sarcastic? How is the most expensive tech available "cheap for what they are"?

    Don't answer. We already know what you're going to say.
     
    Underdog likes this.
  5. Arris

    Arris TS Evangelist Posts: 4,698   +428

    The only thing that has an element of magic about these devices is the pricing...
     
  6. Squid Surprise

    Squid Surprise TS Evangelist Posts: 2,563   +1,548

    So it costs $300 and sells for $800.... I feel terrible for Apple only making $500 profit on each device sold - not to mention that costs will decrease down the road but prices won't decrease until the next model comes out next year...

    Still, it's not like Galaxy/Notes aren't just about as profitable for Samsung - and as they make the OLED screens themselves, it might even be MORE profitable.... anyone got an estimate of how much a Note costs to build? They sell for about the same as the iPhone...
     
    Reehahs likes this.
  7. mctommy

    mctommy TS Guru Posts: 303   +68

    According to Android authority:

    "The bill of materials (BOM) for the 64 GB version of the flagship device totals exactly $301.60. When the manufacturing expenses are added ($5.9), the total cost increases to $307.50. This means the actual cost of manufacturing a Galaxy S8 is $43.34 higher than that of the S7. It’s also higher than the total production cost of the Galaxy S7 Edge by $36.29."
     
  8. Squid Surprise

    Squid Surprise TS Evangelist Posts: 2,563   +1,548

    So slightly less profit than Apple.... But only slightly....
     

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