Apple charges at least $1,099 for the iPhone 14 Pro Max. But how much does it actually cost the company to produce its flagship phone? While Apple doesn’t disclose its profit margins or production costs, we know that in Q1 2023, its products’ gross margin was 37%.
According to a Counterpoint Research report, the iPhone 14 Pro Max costs Apple up to $464, which is 3.7% more than it cost the company to make the iPhone 13 Pro Max. Its mmWave version, for example, is $10 more.
Counterpoint values the cost of the iPhone 14 Pro Max by the blended bill of materials (BoM). While a few components were way cheaper than in previous generations, the new processor and a new camera panel were responsible for the price increase.
The report highlights that the 5G technology costs Apple less than it did as it became more popular. Diversifying supply chain sources also helped the Cupertino firm to secure the best prices. On the other hand, the components that got more expensive weighted more on balance.
- The display now accounts for 20% of the total price. Due to the new Dynamic Island cutout and the Always-On display technology, the iPhone 14 Pro Max is more expensive than its predecessor;
- The new A16 Bionic, which is made of 16 billion transistors, is also 6.7% more expensive than the A15 Bionic chip that powers the iPhone 13 and the regular iPhone 14 models. It’s estimated that producing the new processor costs $11 more.
- Last but not least, the new 48MP lens with a quad-pixel image sensor, the new sensor-shift stabilization, and the improved front-facing camera were also responsible for this price increase.
That said, wouldn’t it be nice to pay under $500 for the top-tier iPhone of the year? However, it’s important to note that the components are not the full picture of the smartphone price, as Apple has to develop most of the technologies, including, of course, the software.
With rumors saying the iPhone 15 Pro Max/Ultra will have a periscope lens and a new titanium finish, we’ll have to see if other components will make this iPhone cost more or less to Apple.