Chinese industry insiders have released an estimate on how much the iPhone X costs to make, and the results show a figure that might not be as low as Apple would want.
Despite iPhone X supply problems likely to extend into the first half of 2018, Apple fans will still have their sights set on purchasing the $1,000 smartphone. How much will Apple make for each iPhone X unit sold?
iPhone X Cost To Make: $412.75
The most expensive component of the smartphone, unsurprisingly, is the 5.8-inch Super Retina display that is supplied by rival Samsung. According to the report, Apple is paying $80 for each unit of the display, though there have also been suggestions that the cost reaches up to between $100 and $120 per unit.
The highly touted A11 Bionic chip of Apple, meanwhile, costs $26, with the Qualcomm modem carrying a price tag of $18. The 3D Face ID sensor is priced at $25, the front glass panel is valued at $18, the 256 GB NAND memory by Toshiba costs $45, and the 3 GB of RAM is $24.
At $412.75, this means that Apple's profit margin for the $999 iPhone X is about 59 percent, which is a fairly high number on first glance. However, this only considers how much it is to gather all the components of one unit of the smartphone, and does not yet include other expenses such as the actual cost of manufacturing, logistics costs, and research and development expenses.
iPhone X vs iPhone 7 vs iPhone 6s
The iPhone X is light years more advanced compared to previous iPhone models, but studying their profit margins show a certain trend in Apple's manufacturing process.
The iPhone 6s, released in 2015, was reported have a total production cost of $187.91, which means a profit margin for the then $649 iPhone 6s of about 71 percent.
The iPhone 7 manufacturing cost, meanwhile, was reported to be $224.80, but with a bill of materials worth only $219.80. It was also released with a $649 starting price, which translated into a profit margin of 66 percent.
With the iPhone X profit margin at 59 percent, it appears that Apple is becoming more willing to lower its profit margin as it develops new iPhone models. The profit margin might not be as high as Apple would have wanted, but the company launched a unique smartphone that has the world talking, so it's not all that bad.