Ed Hardy on the component costs for Apple’s flagship iPhone 11.
Apple charges $1099 for an iPhone 11 Pro Max, but the components for this high-end smartphone with assembly cost less than half the selling price.
TechInsights’ total for all the parts and manufacture for the iPhone 11 Pro Max is $490.50. That’s 45% of the amount Apple charges for this product.
Still wrong. It’s likely even less than that because Apple gets special prices on components that are purchased by the hundreds of millions.
The remaining $608.50 isn’t pure profit. The bill of materials (BoM) doesn’t cover Apple employee salaries, advertising and other costs. Research and development on the hardware is not included. Also, the BoM doesn’t include software, and iPhone sales (with some help from iPad) must cover all the expenses for developing iOS and its bundled software.
‘Shockingly Low’ is the shockingly wrong way to look at costs.