iPhone X costs $357.50 USD to make, has higher margin than iPhone 8: analyst

Comments

  • Marshall Davidson

    Go figure as I read somewhere it may have costed slightly more to build than iPhone 8 but either way the margins here are pretty high and suckers continue to buy into the notion its some great value for the money spent when its anything but.
    At the end of the day when you look at what Apple, and others for that matter, pay out to manufacture their goods and the kind of markup that goes into the final price tag its really nothing short of highway robbery. No smartphone is inherently worthy more than $1000 at retail and even at that level these companies would be making a very decent profit.

    • Jon Duke

      I agree. There should be regulations on phone prices. Much like internet was added to the “basic services” categorie, phones should too just cause everyone has one. The CRTC should then regulate the price.

    • Mr Dog

      No one is forcing people to by the most expensive smart phone lol.

    • Jon Duke

      Great argument. Bravo.

    • Mr Dog

      It would be silly to regulate phone prices. No one would innovate then because there would be no motivation to do better if you can’t charge more

    • Marshall Davidson

      Meh…You can’t regulate a free market and what prices a device will bear. As long as people are stupid enough to drop this kind of money on this stuff the manufacturers will continue with the gouging. If however people smartened up and realized how they were being taken to the proverbial cleaners then Apple, among others, would be compelled to start bringing their prices into line with a little common sense and parking their greed at the front door where it belongs.

    • Jon Duke

      The fact that this is true makes me sad.

    • Marshall Davidson

      But you’re talking about communism now. lol!

    • Do Do

      Sorry but think about how ridiculous that is. A phone isn’t exactly food and shelter and there’s plenty of far less expensive choices to choose from that do 90% of what these top flagships can do. However I do agree that these companies are beyond greedy.

    • Jon Duke

      I know it’s stupid. Sometimes, you need stupid solutions to deal with stupid people.

    • Stephen B Morris

      I think the people in the huge lineup at the Apple store that started the night before would disagree with you on worth. For someone to camp out in the rain all night must mean it was worth it to them. I wouldn’t do it, but hey good for them.

    • John Lofwire

      Some ppl take hard drugs and see value in it..

      Humans tend to like acting this way and live a cult life…

    • h2oflyer

      They’re putting high end value on just about everything these days to catch some of the money overflowing from pockets.

      Look what they’ve done to good old whiskey.

  • Jon Duke

    I like how R&D is always an excuse. If the R&D is for the entire Apple family of product, then the cost of it is lowered and split between all those different products. Same goes for shipping. So end of the day, The reason for the markup is simply because of product placement. If the regular model cost X then the premium one has to cost more. The cost of making it is irrelevant.

    • Marshall Davidson

      R&D has little impact on the cost here. I mean the company has to employ engineers regardless and its their job to try and produce new products and technologies in order to stay competitive. Apple has over $100 billion in the bank and nearing a $1 trillion market cap and yet people still believe R&D is eating away so much at the bottom line while they continue to bring in record profits based on fat margins. SMH

    • Jon Duke

      I agree. Matter of fact, that’s what I said.

    • Mr Dog

      I don’t understand this hate for Apple because they want to make money.

      Do you also hate every other company for making high profit margins on the products they sell? I am sure Samsung makes some interesting margins on the TV’s as well, and high end refrigerators.

      The difference here is Apple is able to sell a LOT of these ‘high end’ devices as opposed to other markets where they are only able to sell a few of the high margin items.

    • Jon Duke

      Where did I say I hate Apple? I hate people writing articles and stating that R&D is the reason things cost more. It’s not. I didn’t say I hated Apple. I use an iPhone 7 Plus as my daily driver.

    • Mr Dog

      My bad, slight exaggeration.

      But the higher price for the X is likely to keep up with previous margins. Their guidance overall does not show any uptick in quarterly increase in margins.

      So although the X might be higher margins, there is another part of the company that is bringing the number back down. We can speculate what it is but will never know.

    • Jon Duke

      I do know, to be fair, that I googled the margin on galaxy phones and they are as high as iphones so really, Apple isn’t alone (like you said). I still think consumers in general should boycott the products but that will never happen :p

    • John Lofwire

      Samsung copy apple up to the price lol..

    • John Lofwire

      There is a difference to be logical and to hate apple.

      My wife use an iphone 7 and i use an ipad lol i dont hate apple personally i hate apple business practice.

    • Jon Duke

      Exactly.

    • John Lofwire

      Agreed.

      And the profit Apple make show clearly that the R&D and marketing cost are nothing as they are the one making the most profit out of cellphone sold.

  • thereasoner

    Apple has to make up for the lower profit margins on all the cheap iPhone options available somehow so people with money to burn will be made to pay up.

    • Mr Dog

      Supriseee they are a public company lol.

  • Do Do

    Not trying to defend Apple as this is nothing more than greed but don’t believe for second that Samsung and Google and the rest are any less greedy. It’s just that Apple can get away with more because of their “fans” being so accepting of anything the pull.

    People need to recognise that brand loyalty ultimately weakens us all as consumers.

    • John Lofwire

      Fully agreed.

      Brand loyalty is moronic at best.

      I buy the best device for my need ( wich include gaming , work and be able to choose many devices model and type from various OEM ) Android OEM deliver on all 3 iOS do not.

    • EBIGN

      Sure let’s blame brand loyalty for one of the most valuable tech company. I’ve shopped around before using the best Samsung flagship, which I’ve ended up selling after a few months and returning to an iPhone. It also helps that a lot of people like an iPhone that in grey market, they retain the value after a year. Unlike an Android that when you buy it, if you want to sell it the next, people will only fork half the retail price. For spec-headed people, Android is the greatest phone in the world, but for the rest of us, we just want a phone that works. Also, gets software updated for years and backed with the best warranty in the market.

    • Do Do

      Why don’t you head on over to Apple’s support forums and figure out how well it “just works”. All of these phones have issues. Some built in, some not. Most recent one my daughter is complaining about is some misspelling bug. Sure it will be fixed but sometimes problems aren’t, not for months or forever.

    • EBIGN

      Wow we’re going there? Any company who cares about their customer have a forum. The real question is retention rate. Apple has 92% retention rate while most android manufacturers are at 50%. More peeps are switching to an iPhone. Have fun trying to figure out how to contact Google support.

    • Do Do

      Yes, I believe that’s my point. There’s no critical thinking when it comes to Apple fanboys. Not to be confused with Apple customers, like me who are always ready to drop them if they don’t always keep up or provide me with what I need. I dropped them long ago because iOS couldn’t do what was required by me. Fanboys would rather change what they do in order to stay with Apple rather move on from iOS. That’s also why I moved away from Windows to macOS. Brand loyalty is a bad for consumers, period.

  • Brad Fortin

    It’s amusing how wildly off these low-ball estimates can be, like the display that was said to cost between $120 and $130 but is being given the low-ball estimate of roughly half the actual cost. Almost as amusing as how eagerly Apple haters eat it up and defend it without having any knowledge of how much these things actually cost.

    • Jon Duke

      Almost as amusing as how Apple lovers defend them without having any knowledge of how much these things actually cost 😉

      If a screen is 120$ but I buy 1 million of them, chances are, I won’t be paying 120$.

    • Brad Fortin

      I don’t know the per-component cost but anybody who wants can easily look up Apple’s margins in their quarterly statements and find it’s ~40% for net margin and ~20% for gross margin, which would peg the iPhone’s components at ~$600, so even a casual observer with grade-school math skills can determine that a $357 estimate is wildly incorrect.

      And yet, like I said, Apple haters will eat it up without a second thought and without questioning it.

    • Jon Duke

      That is fair. But, margins are not clearly stating that it is for components. You are using the most likely number as a reference, which is also fair, but could potentially be wrong. Hence, being on any side of this argument is based on “maybes” and potentially wrong.

    • Marshall Davidson

      At most this thing costs about $600 to make and that’s it.

    • John Lofwire

      Agreed.

      Tired of the crap like R&D cost and blablabla.

      Apple make much more profit per device sold than any others OEM even some that have higher R&D spending on mobile like Samsung.

    • Razvan Zamfir

      As a side note, governments often subsidize R&D projects by a healthy margin.

    • Stephen B Morris

      Well I will say this. If Apple is smart, they will stick with Samsung for the creation of their screens for the foreseeable future regardless of the price of them. LG still has a ways to go.

    • Homer J. Simpson

      You are using numbers estimated by an analyst that suspected the yet to be announced (at the time, Sep 6th) iPhone is being billed $120-$130 per display and comparing that to a research today that actually tore down the iPhone X to analyze parts and gather costs.

    • Brad Fortin

      Interesting how neither estimate is accurate in any way and yet you’ll still trust the cheaper estimate over the more expensive estimate. Sounds like bias to me.

    • Homer J. Simpson

      This is not about price. If you have part numbers, you can contact manufacturers to get a quote. If the phone wasn’t even announced, you have nothing to go by other than guessing. If the estimate today was more expensive, I’d still believe the one today’s is more accurate. How are you not getting this?

    • Brad Fortin

      Part numbers are only useful for estimating costs of off-the-shelf components, and everyone knows Apple uses a bevvy of custom, definintely-not-off-the-shelf parts.

      The cost of making a phone is more than just the cost of off-the-shelf components, just like how the cost of making a meal is more than just the cost of the groceries.

    • Homer J. Simpson

      Yes, customizations. A customized display is still a display. Why would it mark up the cost to 200%? If an equivalent display without the customization is $65, and bulk ordering a customized display costs $120, I think any engineer would question the need for this customization. Even with customizations it’s not difficult to get a quote of a display with similar customizations. Unless Apple is building these displays in-house, it’s unlikely you can’t get a close estimate of what a quote is. And that estimate has much more value than a report by some guy before the phone was even announced.

    • h2oflyer

      How much do you think a box of Kellogg’s Corn Flakes costs to make ?

      Why do you think there are so many off shore tax havens ? Much better than other very profitable businesses that have to hide cases and cases of cash.

  • John Lofwire

    Apple did not put more marketing on the X than the 8.
    Apple also put very lil R&D every years.

    So in the end iphone X is just another money grab from apple.

    • Mr Dog

      Money grab with best processor, display and top 3 camera.