iPhone XS Max: How much profit does Apple realize on each of the products sold?



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Is it possible to take an iPhone XS Max, disassemble it in its components, then decipher how much will cost Apple this device that will cost you $ 1,249?

Well, you can certainly remove numbers, but their scope is debatable.

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The other day TechInsights performed a disassembly analysis of an iPhone XS Max with 256 GB of storage, examined each component, awarded it a price, and came to the conclusion that the nomenclature of the handset components had risen to 443 $.

The problem is that it's a pretty insignificant number. For several reasons.

The first problem is that you can not just take the selling price, subtract the nomenclature and find out how much Apple is making money on every sale. You can not even use it for gross margins because Apple does not allocate the costs of R & D and other costs associated with specific devices in its range.

Another problem is that there is not a large catalog that we can examine to get the price of all components. Some elements, such as memory and storage, are quite universal and we can get very good prices (but Apple is a big buyer, more in an instant), but even these parts vary every day. Other components, especially custom-made components such as the A12 Bionic processor, make it possible to make assumptions, but that's about it all.

We can not forget that Apple also buys large volumes. Not only does it allow him to do business to drive down prices, but he can also store certain components that he knows he will need when prices are the lowest.

For more customized components, as volume and yields increase, prices will decline over time. What an iPhone will cost in September of this year will likely be higher than it will cost the same iPhone next year.

It is therefore interesting to have a number to play and compare that to a number out of the pack last year. It's important to keep in mind that only Apple knows how much it costs to make an iPhone, and that number changes every hour.

The best way to determine the cost of an iPhone is to consult the financial statements of the company. Of course, these are not as cool or geeky as hardware disassemblies, but we get a clearer picture by looking at gross margin indications. Although that being said, we do not get specific numbers for the iPhone, and we still have to make estimates.

And based on these data, the gross margin of the iPhone is probably around 40%. Based on this figure, the $ 1,249 iPhone XS Max costs Apple about $ 750 (parts, labor, R & D, administrative and other related costs).

Which means that a good chunk of that revenue – about $ 500 – is a profit.

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