The intricate composition of any smartphone encompasses a wide array of sophisticated components seamlessly integrated into a singular framework. Take, for example, the iPhone 13 Pro, as depicted in the illuminating infographic by Statista below. This remarkable device incorporates remarkable features like Apple’s cutting-edge A15 Processor, a LIDAR-Scanner, and a Display Port Interface, along with other notable elements such as the battery and display. The assembly of these components is an endeavor that comes with a significant price tag.
It goes without saying that the increased sophistication of these components translates to higher production costs. In 2017, Andrew Rassweiler from IHS Markit (now S&P Global) meticulously disassembled the iPhone X in an effort to estimate the overall manufacturing expenses. In a press release issued by Business Wire, Rassweiler affirmed, “the [iPhone] X’s extraordinary screen and TrueDepth sensing capabilities set the phone apart and contribute to its elevated cost.”
However, this increased cost affects not only the manufacturer but also the consumer. While the A1865 iPhone X had a retail price of $999, IHS Markit estimated that the materials alone cost Apple approximately $370.25, showcasing the considerable margin.
Bank My Cell, in their insightful analysis, compiled IHS Markit’s bill of materials estimates for other iPhone models, yielding intriguing findings. According to their report, the original iPhone from 2007 had a production cost of $217.73 and was sold for $499, yielding a retail markup of 129.18%. Surprisingly, this seems to be the lowest markup until the advent of the iPhone 11 Pro Max in 2019. With a retail price of $1099 and an estimated production cost of $450.50, the markup amounted to 124.06%.
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