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

iPhone X front sensor

While we all know that smartphone companies have healthy profit margins, it can still be fairly jarring to consider the markup in dollars.

That’s especially true when it’s one of the most expensive devices on the market, the iPhone X.

Research and analysis firm TechInsights has released a teardown, reported on by Reuters, estimating that the iPhone X costs $375.50 USD (about $480 CAD) for the company to make. The number is shocking, considering the company is selling the device for $999 USD, or $1,319 CAD.

Of course, it’s also important to keep in mind that research and development, shipping and marketing all factor into development costs, as well — which aren’t accounted for in this report.

It’s also worth noting that Apple isn’t alone in this — Samsung’s Note 8 retails at around $1,300 as well — but it’s still a noteworthy increase in margin over the iPhone 8, according to the firm.

While the iPhone X’s parts cost 25 percent more than the iPhone 8, the device is 43 percent more expensive, bumping up the profitability of Apple’s most premium offering. The iPhone 8, which retails for $699 USD ($929 CAD), has a gross margin of 59 percent, the iPhone X has a gross margin of 64 percent.

Delving into the materials of the iPhone X, TechInsights found that its new Super AMOLED 5.8-inch display and associated parts cost $65.50 USD, compared with $36 USD for the iPhone 8’s 4.7-inch display.

The stainless steel chassis of the iPhone X also bumped up the cost of production, coming in at $36 USD versus $21.50 USD for the iPhone 8’s aluminum housing.

As with many Apple devices, the iPhone X has come under fire for its expensive price tag, with CEO Tim Cook stating that the device is actually offered at a “value price” and is “less than a coffee a day at one of these nice coffee places.”

Source: Reuters