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Another year, another disassembly estimating the nomenclature (BOM) for the most recent Apple (NASDAQ: AAPL) iPhone Last year's iPhone X was estimated at around $ 370 for a basic 64GB model. Investors often use these types of third-party nomenclature estimates to gauge the profitability of new gadgets, which has impact on the company's gross margin. With the iPhone XS Max priced at $ 1,100 to $ 1,450, it could be incredibly profitable. However, the device has the largest screen that Apple has ever integrated into an iPhone, and it also uses expensive OLED technology.
Here is how much is the iPhone XS Max.
iPhone XS Max. Image source: Apple.
Technical disassembly
TechInsights has released its initial nomenclature estimates for a 256GB model, whose retail price is $ 1,250. The overall internal design is similar to that of the iPhone X, but has higher costs than the iPhone X. Here is a breakdown and a comparison of the iPhone XS Max and the iPhone Max. (Note that the TechInsights estimate for the iPhone X differs slightly from the IHS Markit estimate mentioned above.)
|
Component |
iPhone XS Max |
iPhone X |
|---|---|---|
|
Application processor and modems |
$ 72 |
$ 66.22 |
|
Drums |
$ 9 |
$ 6.46 |
|
Connectivity and sensors |
$ 18 |
$ 17.11 |
|
Cameras |
$ 44 |
$ 42.80 |
|
Display |
$ 80.50 |
$ 77.27 |
|
Memory |
$ 64.50 |
$ 45.35 |
|
Mixed signal and RF |
$ 23 |
$ 23.31 |
|
Power and audio management |
$ 14.50 |
$ 14.16 |
|
Other electronics |
$ 35 |
$ 32.51 |
|
Mechanical and housings |
$ 58 |
$ 45.71 |
|
Test, assembly and support materials |
$ 24.50 |
$ 24.55 |
|
Total |
$ 443 |
$ 395.44 |
Data Source: TechInsights.
The main drivers of cost increases are the baseband (Apple Gigabit LTE adopted this year), a larger OLED display, a larger battery, more memory and a "significant increase in the cost of non-electronic components." Estimates are preliminary in nature, include assumptions and may change slightly, TechInsights warns.
As always, these estimates of the nomenclature relate mainly to hardware components and assembly costs and do not include other variables affecting the reported gross margin, such as marketing costs, collateral and yield, software development costs and amortization of the manufacturing infrastructure. . That said, estimates suggest that the iPhone XS Max model in question has an approximate hardware margin of 65%.
It should be noted that IHS Markit has published separately its own estimates this morning as well. IHS Markit estimates that an iPhone XS Max of 64 GB has a nomenclature of 390 dollars. The researcher notes that the cost of the OLED display is comparable to that of the iPhone X last year, just like the TechInsights estimates above. But it's a comparable cost for a much larger 6.5-inch OLED display instead of a 5.8-inch OLED display. This "indicates that there has been a significant price erosion of OLED screens between the 5.8-inch OLED display last year and the 6.5-inch version of this year, which Apple has not apparently not passed on to consumers, "according to IHS Markit.
Evan Niu, CFA owns shares in Apple. The Motley Fool owns shares and recommends Apple. The Motley Fool offers the following options: long calls from January 2020 to $ 150 and short calls from January 2020 to $ 155 on Apple. Motley Fool has a disclosure policy.
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