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iPhone X Costs Apple $370 in Materials: IHS Markit (ihsmarkit.com)
Engineers at marketing research firm IHS Markit cracked open the base version iPhone X, which Apple is selling at $999, this week. After preliminary physical dissection, the firm estimated that the iPhone X carries a bill of materials of $370. From their findings: With a starting price of $999, the iPhone X is $50 more than the previous most expensive iPhone, the 8 Plus 256 GB. As another point of comparison, Samsung's Galaxy S8 with 64 GB of NAND memory has a BOM of $302 and retails at around $720. "Typically, Apple utilizes a staggered pricing strategy between various models to give consumers a tradeoff between larger and smaller displays and standard and high-density storage," said Wayne Lam, principal analyst for mobile devices and networks at IHS Markit. "With the iPhone X, however, Apple appears to have set an aspirational starting price that suggests its flagship is intended for an even more premium class of smartphones." The teardown of the iPhone X revealed that its IR camera is supplied by Sony/Foxconn while the silicon is provided by ST Microelectronics. The flood illuminator is an IR emitter from Texas Instruments that's assembled on top of an application-specific integrated circuit (ASIC) and single-photon avalanche diode (SPAD) detector from ST Microelectronics. Finisar and Philips manufacture the dot projector. IHS Markit puts the rollup BOM cost for the TrueDepth sensor cluster at $16.70.
When he arrives at the customer's house, he inspects the faucet, installs a new rubber gasket, and gives the customer a bill for $100.
"This is outrageous," says the customer. "I demand an itemized bill."
The plumber quickly writes up an itemized bill:
Rubber Gasket: $0.50
Knowing where to put it: $99.50
Apple is a company that wants to make money. They also need to do things like, you know, pay people, rent/own/lease buildings/stores, pay for electricity, pay for marketing, bandwidth, servers, turn a profit, that sort of thing. It's almost as if they are selling phones in a capitalist society where they can set a price and people can choose to buy it or not. Gasp, they are selling their top of the line phone for significantly more than the parts required to make it cost!
I work at a software company. We don't even sell a physical thing, people just pay us for some bits they download. We must be doing an OK job because people keep paying us, it's like our software provides value for them to do work.
That's the essence of all economics. If you trace the components back to their source, its a few cents worth of sand, aluminum oxide and other ores and petroleum. Everything else is labor, licensing fees and debt service.
And taxes. So one could accurately say that an iPhone X costs $1000. Paid to Apple Jersey. Net profit for Apple USA: $0.
Have gnu, will travel.
Markups like this, in all kinds of industries, are not uncommon, and quite frankly, are to be expected.
It is foolish to expect that a provider of a product will sell a product in retail for as low as they can and still make what they think will be a respectable profit when they can make far more by selling it for the most that they can that people are still willing to buy it for.
Is Apple being greedy? Of course they are... but it's their product, and they have absolutely every right to dictate how much they want the end user to pay for it.
File under 'M' for 'Manic ranting'
People who get upset over margins have never ever run a business.
Engineering and writing software are also negligible costs. The stores also operate rent-free because the mall landlords offer free rent for the prestige of having an Apple store, and there are no appreciable costs for sales/marketing, health benefits, salaries, testing hardware/software, etc. Apple employees work for free!
A mash-up of components without software and without online services would be as useful as a rock.
What about all the services included with the iPhone? Email account, iMessages, Facetime, iCloud, App store (some applications are free but Apple still has to run all the backend even if you never buy anything there).
There's also all the engineers to pay for designing the hardware, all the software developers to pay for writing iOS and all the included programs.
#DeleteFacebook
I think this BOM is total BS and whitewash. You can get a laptop for $600 retail with a bigger screen, faster CPU, more RAM, bigger secondary storage. Apple pays way less than a typical consumer or distributor, because they are a business and they buy in bulk resulting in low component price.
A realistic BOM is probably close to $200-$250. They still have to pay the design costs, manufacturing costs etc. That is probably another $100-200.
*Sigh* Another ass-hole who does not how the fucking market works.
The market dictates the price. If stupid morons are willing to pay $999, then that's the price. If the product doesn't sell, then a new price is set.
Apple dictates nothing.
And clearly their products are over-priced.
A $500 meal at a fancy restaurant is made from $10 worth of food.
How many years of R&D were behind this phone. How many failed ideas tried. Redesign Because of changes in competition... plus they will only sell this phone for about a year until the next version.
The parts breakdown is more or less what will be needed for a knockoff product that will get sold next year.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
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