Apple makes 64 percent gross margin on iPhone X sales
It costs $295 to make an iPhone 8 Plus. Apple extracts 63 percent pure margin off of its $799 price tag. It was the most expensive iPhone for the company to make up until we found out that the iPhone X cost more. Much more.
Engineering researchers at TechInsights estimate a base model iPhone X to cost $357.50 per unit for Apple to make at its current scale. The surprise for some analysts is that per retail prices, the iPhone X has the highest gross margin per unit at 64 percent versus the iPhone 8’s 59 percent.
Keep in mind that gross margin disregards any labor and R&D costs.
The firm told Reuters prior to publishing its bill of materials report later tonight that two major items bumped up the bills between a regular iPhone and the iPhone X. The more 4,7-inch typical LCD screens featured on the iPhone 8 cost $36 while the 5.8-inch Super AMOLED display — a Samsung Display hallmark — cost $65.50. The aluminium chassis for the iPhone 8 cost $21.50 while the stainless steel body for the iPhone X was $36.
Apple has reportedly had trouble mounting a sustainable supply of panels and housings as production has gone on.
Many manufacturers have cited the rise in raw material costs as a motivator for price hikes and declining sales or decreased revenue from maintaining the current strategy. Some blame Apple’s large scale parts orders for taking oxygen out of the components market for competitors.