In this guide, we will show you everything you need to know about how much does it cost to manufacture an iphone, so keep reading!
Below you can find out 5 different methods much does it cost to manufacture an iphone,
- Method 1 – How Much Does It Cost To Make An Iphone 11? | Nbc News Now
- Method 2 – The True Cost Of The Iphone
- Method 3 – How Much Does It Cost To Make Your Own Iphone?
- Method 4 – How Much Would It Cost To Make An Iphone In America? – How Money Works
- Method 5 – The Real Price Of Your Cell Phone | Mobile Phone | Endevr Documentary
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 – 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 3 – 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 4 – 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 compete with domestic factories this had a few major benefits for the world. Economy the salaries in these electronic factories may have been low but they were still far better than what these.
Workers would have made working on a substance farm the other big thing that it did was make things a. Lot cheaper the average tv today sells for about 400 bucks and you would need to get a seriously impressive. Model for it to come anywhere close to matching the average household income even despite stagnant wage growth imports have. Become the cheaper alternative or really the only alternative so why are these goods so much cheaper its because we. Can exploit the cheap labor in these developing countries right wrong the cost breakdown of an iphone looks something like.
This there are the fixed costs of researching and developing a new phone model that need to be paid off. Before the first unit even hits the production line that gets broken down and shared amongst all the phones that. Are produced with that design which goes on until a new model needs to be designed to keep up with. The competition on top of r d there is the actual components the camera the battery the processor which are. Provided by other companies that just specialize in making these small parts then there is the labor cost an article.
By the new york times reported that a foxconn factory in zhengzhou could produce 500 000 iphones a day and. Employed an astronomical 350 000 workers this means that on average it takes roughly 17 man hours to manufacture a. Completed iphone from raw materials and components this report is from 2016 so things could have changed since then with. Newer models and more automation on assembly lines but the companies involved are naturally pretty tight-lipped about this kind of. Stuff so for now lets assume that this is the industry standard the next cost is the profit component of.
The manufacturer no major phone companies actually produce their own phones they instead outsource manufacturing to companies like foxconn celestica. And tdk these companies will mark up the phones beyond their raw manufacturing costs in order to make a profit. Themselves after all they arent a charity they want to make money for their shareholders there is also shipping taxes. And the profit that the companies themselves will make for selling each individual phone once all of these are added. Up we are left with the price that you pay as a consumer if we think of all these cost.
Factors individually it makes it a lot easier to assess the impact of moving manufacturing on shore if we assume. That all other variables stay the same we simply need to change this variable here it takes the average worker. 17 hours to produce a phone so if we multiply 17 by the average wage of a production line worker. In a foxconn factory in china we find that labor accounts for 42 dollars of the price of an iphone. If we change this to reflect the average salary of an unskilled production line worker in the united states this.
Number would grow to 263 dollars so if both apple and their manufacturing partners wanted to maintain their profit margins. Then an iphone would cost the end consumer an extra 221 dollars this actually doesnt sound so bad the average. Smartphone is much more expensive today than the early models that came out a decade ago ironically the prestige of. Having an american-made iphone might actually be enough to attract certain buyers which is almost the opposite of consumer behavior. 40 years ago when foreign imports were the status symbol foxconn actually did invest heavily into manufacturing in the u.s.
But these projects have since mostly been abandoned whether that was because of the pandemic or whether it was because. Of economics that just didnt make sense its quite hard to say but let me re-raise the question i asked. At the beginning of the video how much extra would you be willing to pay to have an american-made phone. I dont think many of you would actually be willing to part with this extra money i am personally as. Pro local industry as they come and i honestly dont think i would pay extra if given the choice but.
As you might have expected it only gets worse from here so far we have only changed one variable the. Labor cost but moving manufacturing to the states does much more than just that tim cook has said that the. Biggest hurdle to domestic manufacturing is not labor costs its the skills and infrastructure the iphone is made of dozens. Of components which are made in countries like taiwan vietnam india or china itself importing individual electronic components into america. Is much less efficient than importing completed products so the shipping and handling costs would increase drastically these increase costs.
Might be offset slightly by the reduced cost of transport for the finished product within america but iphones are sold. All over the world one of the biggest markets for the iphone is china a market with consumers who are. Poorer and therefore more price sensitive due to higher sales taxes an iphone actually costs more in china than it. Does here in the states needing to ship components from asia across the pacific and then back again would only. Expand this price imbalance against the country that can least afford it so what if american iphones were made in.
America and iphones for the rest of the world were made in their own local hubs this actually happens quite. A lot in the automobile industry some of bmws largest plants are not actually in germany but rather south carolina. This is primarily done to avoid the cost of shipping and import duties but it costs much more to ship. A 4 000 pound car overseas than it does to ship a comparatively tiny iphone this reduction in domestic shipping. Costs would be dwarfed by the increased cost of needing to retool and retrain a dozen factories rather than just.
One factory every time a new phone is released anyway this doesnt really solve the main issue an iphone assembled. In america from parts made in asia doesnt mean we are less reliant on fragile global supply chains or any. More immune to the actions of potentially hostile governments so lets go from the feet up and assess what would. Happen if we moved everything on shore just like the good old days well this is where prices get out. Of control very quickly lets start off with the good news shipping would cost less but everything else would cost.
A lot more finding enough people in america to just work in the assembly plant might be a major challenge. Right now when you throw in the need to manufacture all these components locally as well then it would be. Almost impossible especially considering that component manufacturing often involves skill sets that just arent trained anywhere in america of course. Money can solve everything so with enough research and development and training it is possible but its going to be. Expensive a company would need to train an entirely new workforce and pay them enough to tempt them to leave.
Their current jobs these components are going to cost a lot more because they themselves are influenced by the labor. Costs that go into putting them together in the very long term these costs may be brought down once the. Infrastructure is established and training in micro component manufacturing is something that people do themselves to get a job rather. Than having training given to them as a requirement to gain the necessary manpower but in the short term an. Iphone would be just the same as a tv 40 years ago ridiculously expensive unfortunately most established businesses really cant.
Make huge risky bets that only have the potential to break even decades into the future they have stakeholders and. Shareholders to keep happy and the status quo is great at achieving that now obviously wages have been a major. Variable throughout all these calculations but if the headlines are to be believed then all of that might be about. To change go and watch my video on the real reason why 40 of people are about to quit their. Jobs to find out as always a big thank you to my channel members and patrons on patreon for making.
It possible for everybody to keep on learning how money works you.
Method 5 – The Real Price Of Your Cell Phone | Mobile Phone | Endevr Documentary
Our relationship with the mobile phone we look at ours an average of 150 times per day over the course. Of 20 years they have become more than a companion they are virtually our new religion across the globe 57. Mobile phones are sold every second which works out 1.8 billion per year today there are more mobile phones than. Toothbrushes in the world yes yes you did hear that right and the big winners in this revolution are the.
Mobile phone multinationals its party time at apple nokia samsung lg sony hawaii and htc but faced with these corporate. Giants we asked ourselves a very simple question behind the scenes how are our phones manufactured and under what conditions. We spent one year trying to answer this question we traveled around the world to find out exactly what is. At the other end of the line and frankly what we discovered made our blood run cold in china we. Went to work in one of the factories that manufacture our phones behind these masks we found dozens of children.
To we also trace back to the raw materials that our phones are made from in africa men die to. Supply our mobile phones with minerals people die every month on average those meet your personal values so now put. Your phone on silent while we reveal the secrets of how it is made to find the answers to our. Questions on how our phones are manufactured we look to china whose factories supply the entire world the majority of. Phones that are sold across the globe are manufactured here we were able to access over 20 reports from a.
Company that analyzes all of the phones components including parts software and materials and more importantly the difference between the. Cost of manufacturing a mobile phone and its sale price in the stores take for example the galaxy s4 not. Including marketing costs samsung achieves a profit margin of 307 e.
Conclusion – How Much Does It Cost To Manufacture An Iphone
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