Apple is enjoying a healthy gross margin of 64% with the iPhone X

The Jolt Journal (https://www.joltjournal.com)

The iPhone X smartphone isn’t cheap, at all. The entry level iPhone X 64 GB starts at $999 and the 256GB model retails for $1,149. The iPhone X is by far the most expensive iPhone Apple has released to date. The company justifies charging such price because of the more advanced technologies and complex components in the smartphone. Apple managed to pack the smartphone with incredible features, showing off their engineering brilliance.

Due to the engineering, the bill of materials (BOM) for the iPhone X is also quite high. Citing data obtained from TechInsights, Reuters states that the iPhone X 64GB version costs approximately $357.50 to produce. In comparison, the iPhone 7 costs $220 to make while the BOM for the iPhone 4 was $187.51. This makes the iPhone X hands down the most expensive iPhone to make, ever.

The reason for the huge different in costs for the iPhone X, to no one’s surprise, is the brand new edge-to-edge display:

Several of Apple’s design choices for the iPhone X pushed up its price. In particular, its 5.8-inch (14.8 cm) edge-to-edge display and associated parts cost $65.50, compared with $36 for the iPhone 8’s 4.7-inch display, the analysis found.

That is largely because the iPhone 8 uses older LCD technology, while the iPhone X uses what is called “Super AMOLED” technology, which allows for more vivid colors and a thinner overall design.

It doesn’t come much of a surprise that the new display is the most expensive component in the device, and the factor that drives the cost of the phone up. Other pricey components of the iPhone X includes the device’s stainless steel chassis, which is about $15 more expensive over the aluminum used in the iPhone 8.

Assuming that the data provides by TechInsight is correct, Apple is making a very healthy profit on the iPhone X. Talking about the $999 starting point, every iPhone X sold gets Apple a gross margin of 64%, which is a very impressive figure. Reuters also notes that the Apple enjoys a margin of 59% on the iPhone 8.

CategoriesApple Business
Hamza Khalid

Hamza Khalid is the Lead Editor at The Jolt Journal. You're more than welcome to follow him on Twitter and follow The Jolt Journal on Twitter and Facebook. If you have any questions, concerns, or need to report something in this article, please send our team an email at [email protected]. This story may be updated at any time if new information surfaces.

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