A market analysis firm has conducted a bill-of-materials analysis on Apple’s latest flagship smartphone. Although the base model of the iPhone 14 Pro Max phone starts at $1,100, it costs less than half that to make the thing. According to this firm’s analysis, the total cost of materials is $464 for the base model with 128GB of storage. That’s for the non-5G version in what the firm calls a “blended” analysis. The 5G version costs up to $474, but that isn’t sold in every country. The report doesn’t include key hidden costs for each iPhone, but it’s an interesting look at Apple’s costs for its most popular product.
The report was compiled by Counterpoint Research, which regularly conducts these Bill of Materials (BoM) analyses on popular mobile products. It releases a summary and creates a detailed version to sell to clients. The summary of it includes several interesting tidbits of data. For example, $464 represents a 3.7% increase in total cost compared with the 13 Pro Max. This increased cost is partly due to fabricating the new A16 Bionic SoC on TSMC’s 4nm process. The report says it costs Apple $11 more per phone for its latest chipset than the A15 Bionic, the SoC that went into all of the iPhone 13 models and the base model 14 and 14 Plus. It was made on TSMC’s 5nm node.
(Image: Counterpoint Research)
In addition to the more expensive chipset, the report says Apple’s new 48MP camera system and aways-on display are the main factors driving up costs. The processor and the display combined comprise 40% of the total cost. The wireless chips and camera system take up an additional 24%, with an anomalous “others” eating up the rest. Despite the expensive SoC, camera, and display, some parts were less expensive than in the past. According to 9to5Mac, the phones’ cellular parts dropped in price by 13% due to 5G technology becoming more prevalent. Despite Apple’s increased costs, the 14 Pro Max was offered at the same price as the 13 Pro Max.
Though these numbers are interesting, they don’t include many big-ticket items behind the scenes: R&D costs, packaging and distribution, and the costs to sell and market the phones. Those numbers would consume much of the cost of a low-margin product. However, Apple reportedly stated recently it generally has a gross margin on its products of around 37%. Notably, that’s the exact same number Samsung has reported as well.
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