The iPhone X costs Apple $357.50 to build

Shawn Knight

Posts: 12,515   +122
Staff member

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

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m4a4

Posts: 1,944   +1,726
TechSpot Elite
And that's why I call Apple (and some other leading Android makers) a fashion brand and stay away from them. I'd rather not pay more for the logo than the actual hardware.
 

Uncle Al

Posts: 7,387   +5,817
That has been Apple's business model for longer than I can remember. Cost x 3 = price point.
 

Kezhen Gao

Posts: 30   +32
Looks like that value is strictly for hardware manufacturing? What about research and development. Hardware and software. As much as we can bash then for not being innovative. There's still a large team of people to write the os, test, etc.... are their salaries and costs factored into each of the units?
I am sure Apple is still making a ton of money per sale.....
 

Kenrick

Posts: 631   +401
Looks like that value is strictly for hardware manufacturing? What about research and development. Hardware and software. As much as we can bash then for not being innovative. There's still a large team of people to write the os, test, etc.... are their salaries and costs factored into each of the units?
I am sure Apple is still making a ton of money per sale.....
Finally someone who has sense. kudos for you.

Keep the comments pouring in.
 

trparky

Posts: 804   +760
OK so even if the cost of the iPhone X is $357.50 that doesn't take into account other various costs for the company. There's having the Apple Store itself, the employees in the store, the logistics of getting the devices to the store, the employees involved in the R&D of building such a device, the employees that maintain and update iOS, etc. There's more to the cost of the iPhone than just the bill of goods to build that device. Probably less than 10% of the cost is profit for Apple.

Other devices such as the Samsung Galaxy devices also cost this much and probably cost just as much (or as little) to build but we never talk about that because it's oh so much more fun to bash on Apple and allow Samsung to get off scot-free.
 

Evernessince

Posts: 5,319   +5,778
OK so even if the cost of the iPhone X is $357.50 that doesn't take into account other various costs for the company. There's having the Apple Store itself, the employees in the store, the logistics of getting the devices to the store, the employees involved in the R&D of building such a device, the employees that maintain and update iOS, etc. There's more to the cost of the iPhone than just the bill of goods to build that device. Probably less than 10% of the cost is profit for Apple.

Other devices such as the Samsung Galaxy devices also cost this much and probably cost just as much (or as little) to build but we never talk about that because it's oh so much more fun to bash on Apple and allow Samsung to get off scot-free.
LOL what?!

You do realize that you can easily find their gross margin through google right?

"37.91%"

That's their gross margin including every product they sell. The number already takes into account overhead.
 

Skjorn

Posts: 557   +408
ALL I want to know is if Tim called it the iPhone "EX" or the iPhone "Ten" wtf is this thing called.
 
D

davislane1

Looks like that value is strictly for hardware manufacturing? What about research and development. Hardware and software. As much as we can bash then for not being innovative. There's still a large team of people to write the os, test, etc.... are their salaries and costs factored into each of the units?
I am sure Apple is still making a ton of money per sale.....
Doesn't matter.

Everyone who hates on Company ABC for making X margin on product Y has nothing of value to add to the equation. Just complaints that someone is putting up hugely bigger numbers than they are.
 

seeprime

Posts: 490   +520
So with another 20% off that to get the actual cost its under $300 total, I'd say true cost per phone is about $260.
If you haven't worked in the industry, you have no basis for using the price points you put forth. The cost of goods sold, which included parts, R&D, manufacturing cost, shipping, and marketing is likely $400 to $440 per unit.
 

cliffordcooley

Posts: 12,471   +5,847
R&D! Yeah that could be cut less than half, if they would simply listen to what consumers wanted.
Marketing! Yeah that could be eliminated, if they would simply give consumers what they wanted.
 

amstech

Posts: 2,643   +1,804
If you haven't worked in the industry,]If you haven't worked in the industry, you have no basis for using the price points you put forth. The cost of goods sold, which included parts, R&D, manufacturing cost, shipping, and marketing is likely $400 to $440 per unit.
I know someone who works in the industry for Corning (Gorilla Glass) and someone that works at Apple, formerly at Amazon. Marketing applies to every product Apple has, but has nothing to do with the true cost of the device so that doesn't apply here, at all. The cost of shipping/parts is the cheapest thing they buy since most components are completed units purchased in bulk, things like RAM and chipsets have no R&D, they are complete units ready to go that can work in many devices. The display was mostly done by Samsung.

These phones are assembled like cars, using known parts to build something "new".
The manufacturing cost is about the same/very cheap since its built like every iPhone since the beginning.
The true cost to build this phone is about $260, give or take.
 
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p51d007

Posts: 2,486   +1,755
WOW! and people get ticked that "big oil" makes 4-5 cents per gallon (government makes more in taxes)
I could just image the outrage if they made a 64% profit on gasoline!
And people continue to line up like sheep to throw away their money. And, until sales drop, the price of
the flagships will continue to skyrocket.
 

Icysoul

Posts: 39   +13
I suspect Apple negotiated some pretty big discounts from the parts manufacturers... so I'm thinking the actual price of the hardware is even lower. And nothing would stop them to negotiate some big discounts when it comes to shipping and marketing too. The sales force and the Apple stores are not, by any mean, being put together just now, for this particular product, so I wouldn't imagine any significant additional costs in this area, either. Long live the iSheeps, I guess
 

thelatestmodel

Posts: 179   +111
"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. "

- biggest load of horse manure I have ever read in my life. Nice try Tim Cook. Actually no, not nice try, you're not even trying to hide it any more.
 

Anton Skryaga

Posts: 38   +17
If you haven't worked in the industry,]If you haven't worked in the industry, you have no basis for using the price points you put forth. The cost of goods sold, which included parts, R&D, manufacturing cost, shipping, and marketing is likely $400 to $440 per unit.
I know someone who works in the industry for Corning (Gorilla Glass) and someone that works at Apple, formerly at Amazon. Marketing applies to every product Apple has, but has nothing to do with the true cost of the device so that doesn't apply here, at all. The cost of shipping/parts is the cheapest thing they buy since most components are completed units purchased in bulk, things like RAM and chipsets have no R&D, they are complete units ready to go that can work in many devices. The display was mostly done by Samsung.

These phones are assembled like cars, using known parts to build something "new".
The manufacturing cost is about the same/very cheap since its built like every iPhone since the beginning.
The true cost to build this phone is about $260, give or take.
iPhone X/8 SoC R&D no cost for Apple? Rly? Ok. So it's cost to build must be lower. May be $200? Oh, no, I think it's about $50. Or $20. Go hate it more ;)

If this is true, Intel/AMD/AnyChipMaker sells bits of silicon with nice microdrawings on for hundreds of $$.

Why to count money in other's pockets? Just buy phone you like (or don't buy) and be happy :)
 

Boilerhog146

Posts: 642   +223
"We’re not trying to charge the highest price we could get or anything like


My BS 'o' meter went off the scale
Tim allmost kept a straight face the whole time. '-' lol

Yeah,that busted. My BS meter.


some stellar marketing though.all the sheep.running to the gate.baaaaa.

Those icons just look so 90'ish,is that windows 95/98?
I hate icons on my phone.
 
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