As Apple continues to release new iPhones with the price of each new one rising, the company may be earning more than most might of thought. Since the release of Apple’s iPhone 4, there is an annual sport for journalists to break down the “true cost” of an iPhones actual worth as a sum of its parts, according to Business Insider Australia.
Canadian firm TechInsights did the teardown for the 2018 update and concluded that Apple spends roughly $610 on components for the new 256GB version of the iPhone XS Max. Although the cost on components is $610, the iPhone XS Max sells in Australia for $2,049.
The comparison between iPhone build costs and retail price seems a little baffling, and Apple CEO Tim Cook claims these annual updates on the iPhone Bill of Materials (BOM) sound like rubbish. During a 2015 quarterly earnings call Cook says, “I’ve never seen one [report] that’s even close to accurate.”
When buying the materials to build an iPhone, there is a lot of budget-eating that goes on, especially with purchasing parts and actually assembling it. Marketing and selling the item as a desirable product are also factors that may diminish a budget.
Although there are many factors that strain Apple’s budget, the BOM does show a noticeable rising trend in the comparison of iPhone build cost versus the price of an iPhone. The iPhone XS is the most expensive iPhone currently and also Apple’s biggest earner in dollar terms. Apple’s marketing division holds a $1439 profit windowto play with between it leaving the factory and into the hands of Apple lovers.
