The iPhone X has received a lot of attention for its higher price point – it’s the most expensive iPhone ever sold by Apple, coming in at $999 for 64GB and $1,149 for 256GB. Today, new data from research firm TechInsights offers a closer look at what specific iPhone X parts are driving that higher price…
As noted by Reuters, the entry-level iPhone X costs Apple around $357.50 to make. Apple sells that model for $999, meaning it reaps a gross margin of 64 percent. That number is slightly higher than the iPhone 8, which Apple sells for $699 at a gross margin of 59 percent.
Breaking down the iPhone X part-by-part, the new 5.8-inch OLED display is the most expensive piece of the device. That part costs Apple around $65.50, compared to $36 for the 4.7-inch LCD display on the iPhone 8. As you would expect, this is largely due to the OLED technology used in the iPhone X’s panel.
The stainless steel chassis also represents a decent chunk of Apple’s iPhone X cost. Here, you’re looking at $36 for the stainless steel design of the iPhone X, versus $21.50 for the aluminum housing used in the iPhone 8.
Tim Cook commented on the iPhone X’s higher price point during Apple’s earnings call last week, saying the company charges for the value it provides for consumers – not in an attempt to squeeze every last cent out of a device. Cook noted that Apple sees the iPhone X as offering new technologies that are “leading the industry,” thus the reason for the higher price:
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.
Of course, the important thing to note here is that these kind of cost breakdowns don’t account for things such as research and development.
What do you make of Apple’s slightly higher iPhone X margin? Do you wish the company would have made the price slightly lower with margins in line with the iPhone 8? Sound off down in the comments.