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Apple’s $999 iPhone X only cost $357.50 to make

iPhone X

* Apple makes more money from each iPhone X than it makes on an iPhone 8 unit

* $699 iPhone 8 has a gross margin of 59 per cent


Apple Inc’s new flagship iPhone X makes the company more money per phone than its iPhone 8 model, according to an analysis, which found the iPhone X’s flashier parts cost Apple 25 percent more than the iPhone 8, but that it retailed 43 percent higher.

The iPhone X smartphone costs $357.50 to make and sells for $999, giving it a gross margin of 64 percent, according to TechInsights, a firm that tears down technology devices and analyses the parts inside. The iPhone 8 sells for $699 and has a gross margin of 59 percent.

Apple iPhone X
Apple makes more money from each iPhone X (pictured) than it makes on an iPhone 8 unit (Credit: REUTERS/Benoit Tessier)

The finding is surprising because technology products tend to become more profitable as they age and the parts for them drop in cost.

READ ALSO: Samsung mocks the iPhone X in a new advert for Note 8

Apple is unique in the electronics industry for its ability to charge a premium price for its latest devices and for its ability to maintain that price even when selling devices through third parties like telecom carriers, said Al Cowsky, the costing analyst for TechInsights, which planned to post the results to its site late on Monday.

“Apple can be different here because they are the 800 pound gorilla,” Cowsky said.

Apple is unique in the electronics industry for its ability to charge a premium price for its latest devices. REUTERS/Edgar Su

Several of Apple’s design choices for the iPhone X pushed up its price. In particular, its 5.8-inch (14.8 cm) edge-to-edge display and associated parts cost $65.50, compared with $36 for the iPhone 8’s 4.7-inch display, the analysis found.

That is largely because the iPhone 8 uses older LCD technology, while the iPhone X uses what is called “Super AMOLED” technology, which allows for more vivid colors and a thinner overall design.

iPhone 8
iPhone 8 (Credit: Reuters)
Another pricey choice was the stainless steel chassis of the iPhone X, which cost $36 versus $21.50 for the aluminum housing of the iPhone 8. Cowsky said the steel is less likely than aluminum to bend when flexed, a problem that dogged the iPhone 6 when it came out.

“This is their leReusson learned from that,” he said.

[Featured photo: REUTERS/Benoit Tessier]

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