Apple’s flagship smartphone has become a worldwide success. But it’s also one of the most expensive products on the market.
That’s largely due to the fact that it’s been built with an eye toward profit. With an average cost per unit of $769, Apple makes a healthy margin any time someone buys one of its high-end iPhones.
The Cost of Materials
Every iPhone begins with a collection of raw materials. These raw materials are gathered from around the world, then put into place, and finally used to create a finished product.
In many ways, a smartphone is similar to a car, or even an airplane, in that it’s made from a series of parts that have to come together to make a finished device. It’s also a product that requires a lot of planning and hard work to manufacture, so it’s no wonder that the cost of materials is one of the largest costs involved in making an iPhone.
According to IHS Markit, the materials cost for Apple’s newest iPhone, the iPhone 8, comes in at about $35 per phone. That’s a bit less than the cost of materials for its predecessor, the iPhone 7, but it’s still more than you’d expect from a company that makes a billion dollars in profit each year.
This is a pretty big difference, and it’s likely that the increase is due to some sort of cost pressure on Apple, either from suppliers or from the competition. In either case, the increase in material costs could have a big impact on the cost of manufacturing iPhones.
The Cost of Labor
The cost to make a high-end smartphone can be steep, but that doesn’t stop manufacturers from squeezing a few new features into their products. For instance, the iPhone X has a screen with an eye-catching 3D effect. This is one of the reasons Apple (AAPL) is among the top dogs in terms of stock price. Despite the competition, Apple has managed to maintain an industry-leading cult following.
In fact, this past week the company announced a record revenue and net profit for the fiscal first quarter. Keeping the lion’s share of the revenue in-house has allowed the company to focus on a few select markets while cutting costs on the backend.
The Cost Of Design
The cost of designing and manufacturing the latest and greatest iPhone X has been in the news lately. Fortunately, Apple is not known to be short on cash and has plenty of hefty contracts with major wireless carriers. The company also does a good job of managing its supply chain and keeping costs low on the inside and out. To the consumer, the best way to gauge how much a new iPhone will cost is to compare it with a similar model from one of its competitors. This will give you a better idea of how much it will cost to get a new phone into your hands, and if you’re on the hunt for a preowned handset, where you can get the most bang for your buck.
The Cost Of Marketing
The cost of marketing used to make an iPhone is one of the biggest costs that goes into producing a device like this. This includes everything from the development of the product to its marketing and sales efforts.
The company also has to maintain high service standards on its products and accessories in order to earn higher margins and keep consumers coming back for more. Apple’s devices are a major part of its business, and the company wants to be able to provide its customers with the best possible experience.
In addition, a large percentage of the costs associated with making an iPhone is devoted to research and development. This includes things like the development of new software for the device, as well as the design of the phone’s operating system and features.
This type of development requires money that could otherwise be used to make another product. The company also needs to maintain its brand and reputation.
These are all factors that go into the cost of creating a device like this, but it’s important to note that they don’t always affect pricing in the long run. For example, the company’s newest models — the iPhone XS and XS Max — are expensive, but Apple CEO Tim Cook says that it’s worth it to bring new technology to the market.