The iPhone XSMax is the phone that made the iPhone X obsolete after just ten months. That’s the shortest production run for any iPhone in history. Although the X stands for ten, the XS and XS Max are the twelfth generation iPhone. This model is the first plus-sized bezel-less design Apple have produced. At between £999 and £1,099, it’s also Apple’s most expensive phone ever. How much of that purchase price do you get back in components? How much of each iPhone sold goes to pay for the research and development? And what about marketing? Are iPhones little more than a marketing exercise now?
The total cost of the components in the latest iPhone is £353. Can you believe that? Around 35% of the purchase price goes towards the cost of the components? There are overheads of course, but most of the remaining 65% must go to profits. This is Apple’s most expensive phone. Is it also their most profitable? The folks at Apple have also saved some money by removing some 3D Touch components from the display so their latest iPhone has less components but retails for a higher price than other Apple phones.
A firm called TechInsights were responsible for the data presented here. They took the most popular iPhone XS Max – the 256GB variant – and stripped it back to reveal the shocking truth that only 35% of the price covers the cost of the hardware. Of course, the remaining 65% isn’t pure profit. There are overheads like salaries, marketing and research and development to cover but no wonder Apple turned a $11.5 billion profit in the third quarter of 2019.
Bill of materials
When TechInsights opened up an iPhone XS Max and compared its bill of materials with that of the iPhone X, they found a few differences that are worth noting. The newer model is larger and costs more but the materials only cost £37 more. Many of the components in the latest model mirror those in the older model, including the screen, although the OLED screen in the iPhone XS Max is larger, which of course increases its cost. But the fact that they’ve removed some of the 3D Touch components means that the screen only cost £2.50 more than the older screen. The memory cost changed a little more. The new machine has 256GB of internal storage like the old one but this time, the components cost rose by £15.