Apple’s iPhone X Has Higher Margins Than iPhone 8: TechInsights [UPDATED]
According to a new research estimate published today by TechInsights, Apple’s iPhone X is actually more profitable per device than the iPhone 8.
The 64-gigabyte iPhone X costs about $357.50 to make, giving Apple a 64 percent profit margin on a $999 price tag. An equivalent iPhone 8 sells for $699, but is said to have a margin of 59 percent. The figures above are based on a cost-per-part calculation during a teardown of the device.
The discrepancy is significant because unlike the iPhone X, the iPhone 8 is a relatively modest evolution of the iPhone 7. The device does include a number of changes, including Qi wireless charging, an A11 Bionic processor, camera upgrades, and display upgrades. However, shares the same form factor, and continues to use LCD instead of OLED, in addition to Touch ID instead of Face ID.
The iPhone X’s OLED display and linked parts are estimated to cost about $65.50, versus $36 for the 4.7-inch LCD assembly on the iPhone 8. Another pricey item is the X’s stainless steel chassis, said to be worth $36 versus just $21.50 for the frame on the iPhone 8.
All the cost estimates by TechInsights, which are represented in USD, do not account for expenses in research, development, manufacturing, and marketing.
Update Sept. 27/18: Reuters has now “withdrawn” their story, because “because analyst firm TechInsights of Canada now says its analysis of Apple’s iPhone Xs Max parts was inaccurate and that parts were not removed from the iPhone’s display. There will be no replacement story.”
TechInsights on their mistake:
We have revised our initial estimates of the component cost of the iPhone Xs Max from $443.00 to $453.00, based on new information about the 3D touch system. Our initial review of the phone indicated that some of the 3D components that were included in last year’s iPhone X had been removed, but further investigation revealed this not to be the case. We can confirm that the iPhone Xs Max includes the same Broadcom BCM15951 3D touch controller used in the iPhone X.
This increases the Display cost from $80.50 to $90.50, for a total cost of $453.00.