In this guide, we will show you everything you need to know about how much does it cost apple to make an iphone, so keep reading!
Below you can find out 5 different methods much does it cost apple to make an iphone,
- Method 1 – How Much Does It Cost To Make An Iphone 11? | Nbc News Now
- Method 2 – How Much Does The Iphone 12 Cost Apple
- Method 3 – The True Cost Of The Iphone
- Method 4 – How Much Does It Cost To Make Your Own Iphone?
- Method 5 – How Much Would It Cost To Make An Iphone In America? – How Money Works
Method 1 – How Much Does It Cost To Make An Iphone 11? | Nbc News Now
All right the iphone 11 pro and promax are here theyre the phones of that funky three cameras on the. Back people really excited about that feature but the big factor when deciding whether or not to upgrade is the. Price tag is it worth it the iphone pro starts around $1000 the pro max around 1100 but what does. It actually cost apple to make one of these things we partnered with our friends at tech insights they analyzed.
Apples supply chain and figure out what apple spends on different parts of this thing so we wanted to take. A look at that and see when you add it all up how does that compare to what you actually. Pay for it so lets look at the breakdown for the iphone 11 pro max so the first thing were. Gonna look at is the display the screen is about six and a half inches diagonally and its improved over. Last years model alone it costs roughly 66 50 next up is the battery thats this l-shaped thing that you.
See here an apple crammed even more battery life into this one they say its gonna last you about five. Hours longer than last years model that costs about 1050 the next thing we have is the cameras thats been. Driving most of the hype around this new model because it has three different lenses together those cost around 70. 350 and yep he does look a little bit like wall-e wow and then we have the processors modems and. Memory all of this combined is about one hundred and fifty nine dollars and lastly weve got everything else thats.
Everything from sensors to the supporting materials to the assembly that comes out to about a hundred eighty one dollars. And that brings the total cost to about four hundred and ninety dollars and fifty cents that is less than. Half of that $1,100 retail price that you pay in stores hey nbc news viewers thanks for checking out our. Youtube channel subscribe by clicking on that button down here and click on any of the videos over here to. Watch the latest interviews show highlights and digital exclusives thanks for watching.
Method 2 – How Much Does The Iphone 12 Cost Apple
Apple just announced their iphone 12 lineup and though its not the most revolutionary upgrade per se we did get. A refreshing design change a few more colors some camera improvements and some other nice internal technical upgrades as well. However apple did slightly up their prices for their regular lineup with the 6.1 inch iphone 12 coming in at. 800 as opposed to the 6.1 inch iphone 11 which came in at 700 so how much does apple make.
From the iphone 12 anyways before we get started here i wanted to make it clear that im not criticizing. Apple for making money or anything like that they are a business and a very successful one at that i. Simply find it interesting to try to puzzle together their finances to figure out where our money actually goes with. That being said lets dive into your financial reports conveniently for us apple separates its income by sales category which. Shows us that about 44 of their entire revenue comes from just the iphone aside from this 77.9 of their.
Total revenue comes from physical products so the vast majority of their income is indeed from physical products of course. The wearables category including products such as the apple watch will likely have smaller net margins than the iphone as. They are generally a good amount cheaper this same thing more or less applies to the ipads net margins too. As they are generally cheaper than the iphone as well however their net margins for their services as well as. The mac are likely higher than the iphone so since the iphone is in the middle of their product lineup.
In terms of profit and since iphone accounts for a significant amount of their total sales apples overall margins should. Be roughly reflective of the numbers for the iphone last quarter apple pulled in a total of 46.529 billion dollars. From their products out of which 32.693 billion was the cost of sales this includes all the materials used in. The production of the iphone all the labor that goes into manufacturing equipment costs involved in production utilities used in. The production facility and of course the shipping costs so essentially this includes the cost of all the raw materials.
Involved in producing the iphone as well as all the logistical expenses involved in actually putting it together and getting. It to their stores or your house and this isnt cheap for apple as a whopping 70.26 percent goes towards. Making this happen clearly they arent cheaping out in this sector if we apply this margin to last years flagship. Model we can actually estimate the percentage that goes towards the raw materials and a percentage that goes towards logistics. The iphone 11 pro max came in at a base price of eleven hundred dollars so their cost of sale.
For the iphone eleven pro max was roughly seven hundred and seventy dollars this is the reflection model though and. So they likely had larger profit margins meaning that their cost of sale for the iphone 11 pro max was. Likely closer to 700 last year investopedia conducted some research into the cost of components used in the iphone 11. Pro max and they came up with this breakdown which adds up to 490 dollars and 50 cents in relation. To the purchase price of the iphone 11 pro max the component cost is approximately 45 but considering the iphone.
11 pro maxs larger profit margins this likely comes out to about 50 for the average iphone meaning that about. 20 goes towards labor and all the other logistical expenses we previously discussed moving on we have the cost of. Research and development apple doesnt disclose how much of their research and development expenses goes towards their services and how. Much goes to their physical products if we assume that it is proportional to their revenues from products and services. Respectively approximately 3.709 billion dollars of their 4.75 8 billion dollar research and development expense goes towards their products this.
Indicates that 7.97 percent or about 8 of the iphones revenue goes towards actually developing the iphone and finally we. Have one more business cost which is the cost of selling and administrative expenses this includes the cost of running. All the apple stores paying all the employees working at apple stores marketing and basically everything else involved with actually. Selling their products again assuming that a proportional amount of this cost is spread among services and products about 3.766. Billion of their 4.831 billion dollar selling and administrative cost goes towards their products this again comes out to write.
About eight percent of their total product revenue so that covers all of apples expenses when it comes to making. And selling their products but they do have one more cost like all of us which is taxes their tax. Bill as a proportion of the total revenue comes out to 3.15 percent but we cant just proportionally spread this. Bill amongst their services and their products because income tax is a proportion of income not a proportion of revenue. And as we all know services account for a disproportionate amount of their income so if we base their tax.
Bill on their relative gross profit margins well see that about 61 of apples gross profit is from products and. The rest is from services considering this about 1.149 billion of their 1.884 billion dollar tax bill is for their. Product related profit meaning that about 2.5 percent of their product revenue goes towards taxes at this point generally we. Would have one more cost to account for which would be the profit for carriers and retailers selling the iphone. However in the smartphone market this is basically non-existent retailers and carriers selling smartphones get their profit from the services.
They sell and or their products in their stores so whenever you see a discount from verizon or at t. Its not because they were able to get the phones for cheaper from apple rather theyre just hoping that you. Stay with them long enough for them to make back the money considering all this we can finally estimate the. True cost of the iphone 12 lineup as we now know that roughly 50 goes towards the product itself 20. Percent goes towards labor and logistics 8 goes towards research and development another 8 goes towards selling and administrative expenses.
And finally two and a half percent goes towards taxes taking a look at the iphone 12 mini we have. A starting price of seven hundred dollars out of this 350 goes towards the actual components used in the phone. And 140 goes towards labor and logistics about 56 goes towards each research and development and selling an administration lastly. Seventeen and a half dollars goes towards income taxes leaving apple with eighty dollars and fifty cents research and development. Likely doesnt cost that much for this iphone as apple probably just borrowed heavily from their higher end phones so.
Their end of the day profit for the iphone 12 mini is upwards of one hundred dollars moving on to. The 800 iphone 12 these numbers are pretty similar to the many we have four hundred dollars for components and. One hundred and sixty dollars for labor and logistics sixty four dollars goes towards each r d and selling an. Administration finally twenty dollars goes towards taxes which leaves apple with ninety two dollars again r d is likely not. That much for this phone so apples profit on the iphone 12 is likely right about 100 moving on to.
The 12 pro lineup the entry level model comes in at 1 000 our proportions would tell us that about. 500 goes to the phone itself and 200 goes towards labor and logistics meanwhile r d as well as selling. And administrative costs clock in at 80 each and taxes is about 25 leaving apple with 115 dollars however we. Know that for higher end models the components themselves dont cost proportionally more so the cost of the iphone itself. Is likely closer to 450 dollars and this is the same case with labor and logistics it doesnt cost all.
That much more to put together and ship a higher end phone so thats probably closer to 160 dollars like. The iphone 12. R d however likely cost more as this is where the bulk of the research and development. Went so well call r d about 100 as for administration and selling expenses this is likely lower as administration. Costs arent really going to scale up and ask for selling expenses well most of the people who buy the.
Pro series buy without much pushing from apple so thats likely to be cheaper as well well call it 64. Just like the iphone 12 this would leave apple with 201 dollars or right about 200 and finally for the. Iphone 12 pro max our proportions would tell us 550 dollars for the iphone itself 220 dollars for labor and. Logistics 88 for r d 88 for selling an administration and 27 and a half dollars for taxes however if. We apply the same tweaks as we did for the regular iphone 12 pro we get profits upwards of 250.
Dollars from their flagship phone and of course if you look at the models with upgraded storage options the extra. Cost is basically all profit so at the end of the day if you buy an iphone 12 it cost. Apple six hundred to seven hundred dollars in total and they profit about one hundred dollars if you spring for. The pro series it cost apple about a hundred to eight hundred fifty dollars and apple profits two hundred to. Two hundred and fifty dollars per phone and if you add any storage just add another ninety dollars for each.
Level up honestly i thought their profits would actually be a lot higher given their premium pricing schemes dont get. Me wrong here theyre still profiting a very solid amount especially for the tech sector but fortunately for us it. Seems like a lot of their price increases over the last couple of years did make its way into the. Phone as opposed to apples bottom line do you guys think apples profit margins are reasonable for their base models. Comment that down below also if you guys are excited for the iphone 12 lineup to drop then make sure.
To drop a like and consider subscribing to see more questions logically answered but until then im hari ill see. You guys on the next one you.
Method 3 – The True Cost Of The Iphone
This video is sponsored by brilliant the first 200 to use the link in the description and get 20% off. The annual subscription 2018 was a rollercoaster year for apple in august its stock hit two hundred and seven dollars. Making it the first trillion-dollar company in history then in a dramatic few months it lost four hundred and fifty. Billion dollars as microsoft amazon and alphabet passed it by and for the first time in 15 years the company.
Announced it would make less money than expected the problem fewer people buying iphones the reasons are many chinas slowing. Economy sticker shock market saturation but theres also another big factor apple has a new competitor not samsung not google. Not hallway apple the iphone is increasingly competing with itself one because were all holding on to them longer but. Also because it doesnt cost what you think it does as the price of an iphone goes up something new. Is happening to its value and its shaking up apples entire business model to understand whats really going on we.
Need to calculate the actual hidden price of the iphone generally speaking there are two ways you can get rich. Selling things to people one you can play the numbers game sell a gazillion small things for a few cents. Profit each think gas stations grocery stores and on a good day amazon sure youll probably lose money at first. But sell a few more and now you have the power of scale lower costs higher margins look at you. Or you can sell a few really expensive things ever wondered why your town has like three mattress stores for.
Every one person theyre always empty and yet somehow still keep the lights on well thats because a few feet. Of foam doesnt cost thousands or even hundreds of dollars 50 60 90 percent of a mattress is pure king. Nice profit it only takes a few sales a month to stay in business and therefore disruption but a few. Companies the really really successful ones managed to do both if you can make hundreds of dollars on each item. Sell it thousands of times an hour and convinced those same people to buy again in 12 months and make.
Us want to line up with a smile on our face for the privilege of doing it well now you. Have a 265 billion dollar a year business the iphone is arguably the most successful subscription service in history you. Can bet apple will announce a new model or three every september like clockwork just as surely as you know. Theyll name it something weird the problem is technology is getting really good so good that a lot of people. Are thinking why do i need a new one some of us care about portrait mode and dual optical image.
Stabilization but for most people checking twitter and using wechat is the same on the iphone 10s as the ten. And eight and seven youre invited to the blue bubble club regardless according to analysts the average person waited three. Years to upgrade their smartphone in 2018 this year four of course phones are a little bit weird in this. Respect because so are humans the iphone isnt just a tool its a status symbol according to researchers at the. University of chicago the best predictors of wealth in 1992 were owning an electric dishwasher a fireplace and ooh a.
Garage door opener high-tech today its owning a passport an iphone and ipad which have a 70% chance of correctly. Guessing whether you have a high income owning the newest model signals you have a grand of disposable income to. Spend every year add some ear pods and you wont even hear the sound of the money leaving your bank. Account but that only works if this years iphone looks different from last and apple only really changes its design. Every other year so here we are people are losing their appetite for frequent upgrades but apple certainly hasnt lost.
Appetite for money which means of course higher prices selling half as many phones isnt such a problem if theyre. All twice as expensive the cheaper iphone has slowly crept from six hundred forty nine dollars to six ninety nine. To seven forty nine today the more expensive ten s now starts at $9.99 and goes all the way up. To one thousand four hundred and forty nine dollars of course thats only if youre lucky enough to live in. The us and yet revenue is still down somethings missing to make sense of this we need to answer the.
Question how expensive is the iphone really theres plenty of back and forth on whether the iphone is quote worth. It but what isnt really debated is that in general its higher price than most other smart phones from most. Other brands being selective about which price segments it sells to is pretty much written in apples dna theres no. 300 dollar macbook not because its impossible but because thats just not what its about and with prices going up. Even higher it would seem thats never been more true but sticker price isnt the best way to measure actual.
Cost in fact its pretty misleading phones arent consumable unless you pull a black mirror theres still worth something in. A year or two the price of something like a house accounts for how much its expected to gain or. Lose and value usually the structure itself depreciates styles change and wood rots but the land underneath it appreciates which. Side note is why tiny houses arent investments the land they sit on is often least not owned and therefore. It only loses value basically youve just bought a house shaped rv anyway unless your phone was signed by the.
Ghost of steve jobs himself its more like a car its value goes down and fast but not all phones. Are the same on average iphones lose 45 percent of their value in the first 12 months samsung phones 62. Percent and google 81 that may sound a little pher apple only makes premium devices while samsungs average might be. Skewed by a few low-end outliers so lets look at specific models a year later the samsung sa lost 58. Percent of its value the google pixel excel 82 and the oneplus one 94% meanwhile the iphone 8 still lost.
Only 45 thats a difference of hundreds of dollars and thats before the record-setting iphone 10 in september 2018 only. A week before the 10 s was set to be announced the 10 was still worth six hundred and seventy. Nine dollars it lost only 32 percent of its value taking this into account we can calculate a rough total. Cost of ownership a thousand dollars upfront – 679 for selling it a year later gives us a real cost. Of $320 thats $26 a month to always have the latest and greatest now to be fair sticker price does.
Matter if next years iphone cost twenty thousand dollars and sells twelve months later for nineteen thousand nine hundred dollars. It would be a bit disingenuous to call it a $100 phone but of course resale value is still very. Important and heres why because used iphones are now worth more more people are selling them higher supply meanwhile more. People want the new design but dont necessarily want to spend a whole months rent higher demand the result a. Huge thriving secondary market amazon and ebay are flooded with iphone tens which means the new phone has to compete.
With its still pretty good last generation in other words apple is increasingly competing with itself and the better todays. Iphone the harder itll be to compete against used next year now if youre an investor this all sounds pretty. Bad like sound the alarms bad remember the iphone alone accounts for 60% of its revenue any other company would. Fight this tooth and nail so whats apple doing not only are they not fighting it theyre actually embracing it. Making the iphone last even longer instead of buying a whole new phone because you cant get three hours on.
A charge theyve made it easier than ever to just replace the battery and while android phones often receive only. Two years of software updates ios 12 runs on all these devices going all the way back to the 2013. Iphone 5s and the first ipad air even better it actually speeds up your phone its no longer a trade-off. Of slow as molasses for new features or lets be real pressing update so itll stop bothering you all of. This is awesome for you and i but isnt it a terrible business idea not necessarily unless you buy from.
Apple.com second-hand phones dont directly put any money in its pockets but apple has other ways of making a profit. New or used you still buy apps you still subscribe to apple music apple video icloud and so on the. Iphone is a gateway to things like the ipad apple watch and air pods even if you buy none of. These things youre still useful to apple google for example pays an estimated nine billion dollars a year just to. Be your default search engine 9 billion thats the gdp of haiti for one switch to be flipped user base.
Means control and control ultimately means money in other words things like services can make up for lost sales its. Sort of the in-app purchase model applied to the iphone as a whole in the long term apple needs to. Move its focus away from the iphone and towards new platforms entirely augmented reality glasses are the future as we. Saw in 2018 this transition wont be easy but its the best and really only path forward because the truth. Is whats happening now is normal everything before was an anomaly a very profitable one an easy one for companies.
To get used to but still an anomaly from 2007 until fairly recently the stars were perfectly aligned technology was. Moving incredibly quickly but still always left enough to be desired for next year the smartphone was in its growth. Peer but the average person buying a new phone every year – just isnt sustainable not economically and not environmentally. Phones should last years and years go through two or even three owners and then gracefully be recycled the future. Is one where a few of us buy the latest phone take good care of it and then give it.
Back to apple or sell it secondhand the problem is selling your phone is kind of the worst how do. You know when to sell and for how much so it ends up just sitting in a drawer somewhere dave. Over at heres the bad version has an idea for a solution an app youd scan your phone when you. Buy it tell it how often you want to upgrade and then it sends you a notification when its the. Best time to sell im 100% serious when i say i think this could be a multi-million dollar startup someone.
Just needs to program it you could design the app to make predictions about how the value of your phone. Might change in the future for example with a machine learning course on brilliant which teaches you step by step. Intuitively with its computer science and math courses theyre computer science algorithms course will teach you the concepts behind how. You might design the app to scan the iphones barcode and then generate an ebay listing when the user is. Ready in my programming classes i noticed i learned a lot faster when i was actually making something versus when.
I was just studying arbitrarily plus its just more fun to make something brilliant thinks the same way instead of. Heres this new concept now stored in the back of your head its daily problems give you a real interesting. Problem to solve using your new skills use the link in the description to sign up for free and get. Started today the first 200 people to do so will also get 20% off the annual premium subscription so you. Can view all the daily problems and take all their problem solving courses and after you sign up dont forget.
To go watch daves video.
Method 4 – How Much Does It Cost To Make Your Own Iphone?
This is the number one question i get asked and the answer is well get to the full answer shortly. But first i wanted to give you a few updates about strange parts the last month has been a total. Whirlwind for me i released my seco.
Method 5 – How Much Would It Cost To Make An Iphone In America? – How Money Works
How much do you think it would cost to make a smartphone like this one here in the united states. How much do you think a manufacturer would end up selling this american-made phone for and most importantly how much. Extra would you be willing to pay for your next iphone android or nokia brick to have it made here. In america you dont need to answer just yet but these are some very important questions that have equally serious.
Implications to consumers companies and some of the most powerful economies in the world if you have ever looked into. This issue or even actually tried to purchase a locally manufactured phone you have no doubt seen a dizzying array. Of numbers that claim anything from an american-made iphone would cost ten thousand dollars all the way down to an. American-made iphone would only be a tiny bit more expensive than a chinese-made iphone so which prediction is right well. Weirdly both but with trade and political tensions at all time highs we might find ourselves in a situation where.
We need workable answers to this problem sooner rather than later so its time to learn how money works which. Was made possible by the morning brew daily newsletter i will admit that my mornings used to involve mindlessly scrolling. Through a relevant garbage on whatever social media app i happen to click on first morningbrew is the productive alternative. To that bad habit as the name might suggest their daily newsletter provides a new source that pairs nicely with. Your morning coffee because it is simple relevant and gives you what you need to start a productive day off.
On the right foot many of their articles have been the inspiration for entire videos on my channel like this. One from last week on one of the most unexpected tax havens in the world so if you like this. Channel you will love morning brew and since it is completely free there is no risk in trying it out. As part of your morning routine just to see how much more on top of things you can be consumer. Electronics are just one of many industries which have been lost in western developed nations over the past 40 years.
Prior to the 1970s most durable goods consumed in america or europe were produced right there in that country because. That was the easiest and cheapest way to get things done import taxes and quotas meant that foreign goods were. Real luxuries which commanded a steep premium over their domestically produced competitors thats not to say that locally made goods. Were cheap though an average television set could easily cost the average households entire monthly income and the same was. True of stereos fridges cameras and a variety of other household items that we almost treat as disposable today but.
This started to change when countries like japan south korea and ultimately china built out industrial centers of their own. Which could manufacture and deliver items to the western markets for cheap however it is really important to understand that. This would not have been possible with just cheap labor alone it was actually the increase in trade deals that. Made it possible for foreign factories to .
Conclusion – How Much Does It Cost Apple To Make An Iphone
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