iPhone X's Components May Cost Apple Nearly $600
Apple may be paying a hefty bill to manufacture its new $999 iPhone X, according to a new report.
The total cost of iPhone X components is $581, research company Susquehanna International Group estimates, according to The Wall Street Journal. That suggests that Apple makes $418 in profit per iPhone X, which was announced last week and goes on sale in November, excluding the cost of assembling the device along with additional marketing, administration, and retailing costs.
The researcher didn’t say how much Apple pays to assemble the iPhone X. Nor did it say how much it costs to manufacture the higher-end iPhone X that comes with extra storage and costs $1,149.
Although the iPhone X’s components are pricey, Apple may actually turn a bigger profit on its luxury phone than it did with last year’s iPhone 7. According to Susquehanna, Apple paid just $248 for the components in the iPhone 7.
When released last year, the iPhone 7 cost $649. That translates into a per-device profit margin before assembly of $401—$17 less than the iPhone X.
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Apple has long been known for its large profit margins, which help the company generate billions of dollars in cash each quarter. That doesn’t appear to be changing with the iPhone X, regardless of its higher-priced components like a bigger display and glass design.
Apple has never revealed its actual cost to produce new iPhones, and, in the past, CEO Tim Cook has scoffed at reports of how much the company pays for the components in its devices. It’s important, then, to emphasize that Susquehanna estimates are just that.
The iPhone X will be Apple’s first device to come with Face ID facial-recognition software for unlocking the smartphone and verifying mobile purchases. It will be available for pre-order on Oct. 27.