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Despite High Price Tag, Apple Making Slimmer Margin on iPhone X: Report

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As we all are well aware, the starting price of the iPhone X comes in at $1319 CAD for the 64GB model, making it the most expensive iPhone sold to date. Apple, however, might not be making as much money per device as one might expect.

According to a report from the Wall Street Journal, Apple is expected to have a smaller profit margin for the iPhone X, despite the high price tag. This is due to the inclusion of certain high-end components including the 5.8-inch bezel-less OLED display and the TrueDepth camera system.

“The starting price of the new flagship iPhone X is about 50% more than the $650 starting price of last year’s iPhone 7 [but] the components cost an estimated $581, up from $248 for components in the iPhone 7, according to Susquehanna International Group,” reads the report. “The gap suggests Apple’s profit margins on the new device are slimmer than on existing lines.”

With that being said, it’s worth noting that the numbers are based on analyst figures rather than anything actually released by Apple. As it has shown time and again, Apple’s great at driving hard bargains — which means that any figures are purely estimates.

Nonetheless, it is difficult to ascertain the fair component cost of the iPhone X before it gets a teardown later this year after its availability. Apart from the component cost, research and development expenses also make up a bulk of the device cost.

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  • Ned K.

    Of course, their margin will be lower. The FaceID sensor is expensively made from LG, and especially the display is made by Samsung with high costs of course. Now, other than iOS, I do not see which part is really Apple-made. Apple is losing its unique icon other than iOS and that Apple logo. I have absolutely no interest in purchasing iPhone X regardless of the price tag since it’s half made by Samsung. Its brightness is only 460 nits while Galaxy S8 is 1,000 nits and Note 8 is 1,200 nits. 460 nits of brightness is like going back to ancient time. You won’t be able to see anything in screen outdoor.

    I really wonder what will happen to iPhones’ profit margins in forthcoming years. Samsung is the only company that can make such curvy OLED designs. Sadly, Samsung’s OLED technology is top of the world. There is no competitor. Do you think Apple would have wanted its competitor to make their biggest part: the display? Apple had no choice. Apple should have spent their $$$ on making their own chipset and display plants or something rather than making their shareholders happy with ridiculously high margin.

    iOS would still be the only reason I will stay with iPhone this year, but iOS 11 GM version was quite disappointing. Buggy as hell and was not as fluid as before.

    Apple is definitely going back to pre-Jobs era. Great job at ruining everything Steve built in Apple, Tim.

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