Apple isn’t losing any money on the iPhone X. Despite having an entirely new design and exclusive components, the $999 device is the company’s real money-maker.
The iPhone X is expensive to make, but Apple still earns an impressive amount of money on every unit sold. The same goes for the iPhone 8 that was released in September. It’s just impressive to see the iPhone X rise above the iPhone 8 while being more costly. Still, both of Apple’s latest mobile devices are generating profit margins above 50 percent, according to TechInsights.
An iPhone X with 64GB of internal storage costs Apple around $357.50 and then gets turned around to consumers for $999. That’s a 64 percent profit margin. Meanwhile, the iPhone 8 costs $287 to make and sells for $699. The profit margin on Apple’s secondary iPhone drops to 59 percent.
These estimates from TechInsights are based on calculations during a teardown and do not include research and development, manufacturing, and marketing expenses. So, while the numbers are interesting to observe, they may not be completely accurate. Apple spends a massive amount of money on designing its products and advertising them around the world.
Unsurprisingly it’s the body and display that force the the iPhone X to be more expensive to make than the iPhone 8. Apple’s stainless steel body for the iPhone X costs $36, and the aluminum body for the iPhone 8 costs $21.50. For the display, the iPhone X’s OLED panel from Samsung costs a bit more than $65 while the smaller LCD panel on the iPhone 8 is just $36. The duo does, however, share a few things like the A11 Bionic processor and some camera components.
Look no further than the price to understand why Apple’s getting a better profit margin on the iPhone X. The company knew consumers would flock to the ‘revolutionary’ model, so it raised the price yet remained attractive enough for the masses to buy.