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Apple’s new iPhone X has sparked criticism from many due to its high price tag. At $999 for the base model, it’s among the most expensive smartphones on the market. Unsurprisingly, it’s also costly to manufacturer although perhaps not as bad as you might think.
TechInsights in a recent teardown and analysis of the iPhone X estimates that it costs Apple $357.50 to make each unit. That translates to a gross margin of 64 percent for Apple - great news for company shareholders. By comparison, the iPhone 8 has a gross margin of 59 percent and starts at $699.
Several of the components used in the iPhone X cost a lot more than those found in the iPhone 8.
The 5.8-inch OLED screen and associated parts, for example, cost about $65.50 per unit. According to TechInsights, the 4.7-inch display on the iPhone 8 is just $36. The iPhone X’s stainless steel chassis, meanwhile, costs $36 versus $21.50 for the aluminum chassis on the iPhone 8.
Apple CEO Tim Cook had the following to say regarding pricing during the company’s recent earnings report:
In terms of the way we price, we price to the sort of the value that we’re providing. We’re not trying to charge the highest price we could get or anything like that. We’re just trying to price it for what we’re delivering. And iPhone X has a lot of great new technologies in there that are leading the industry, and it is a fabulous product and we can’t wait for people to start getting it in their hands.
The iPhone X went on sale last Friday. Although Apple hasn’t yet officially commented on the matter, most studies suggest the handset outsold the iPhone 8 and iPhone 8 Plus which launched at the end of September.
Lead image courtesy CNET, second image via iFixit