Apple’s newly announced phones are definitely grabbing the attention of the mainstream public. The newly announced iPhone XS and iPhone XS Max are set to retail for a starting price of just $1,099 and $1,299 respectively. According to a report by IHS Markit, it cost Apple $390 to put the iPhone XS together in materials, that is, the 64GB variant. In contrast, its closest competitor from the Android market, the Samsung Galaxy S9+ cost $375 to build.
The bill of manufacturing above simply states how much it cost Apple to put the iPhone XS together given all of its components. Aside from the seemingly high-profit margins, it is worth noting that a lot of research and design goes into building Apple’s devices, whether that’s the iPhone XS or the XS Max. On top of that, advertising and marketing material do also take their toll on the profit margins before the device finally makes its way into its final consumer’s hands.
On then on top of that, let’s not forget that Samsung is sourcing these displays out to Apple this year too. Being an OLED display with top-notch display quality, the OLED on the Apple iPhone XS cost Apple about $120. To put that into perspective, that gorgeous display just chewed through 1/3 of the total cost of the iPhone XS, not to mention the higher price tag for the XS Max.
Seeing these trends, it simply begs the question of how much these manufacturers are willing to cram into their phones. If we look at the Samsung’s cost to build their phones on the other hands, you’ll notice a trend in which manufacturers like Samsung and Apple are increasing their cost to build these high-end smartphones. For context, the Samsung Galaxy S9+ cost Samsung $375 to put together, the Galaxy S8 $299 to put together and the Galaxy S7 $255 to put together.
The iPhone XS and XS Max have brought a ton of improvements to the table despite their resemblance to last year’s iPhone X. Not only have they beefed up the A12 Fusion, but they’ve also integrated a number of AI capabilities into the camera. The new A12 also takes a bump in its GPU core counts. We’re looking at hexa-core GPU that chews through any synthetic test with each given Apple’s ambitions to push AR into the mainstream. Not only does the camera help identify objects, but to their advantage, the machine-learning capabilities allow it to fully showcased the potential of their cameras by enhancing the image-processing techniques.
Whether these phones translate into sales has to be determined over the course of the next few months. Hopefully, they would be able to pull this off. But with Apple soaring the prices of the XS Max 512GB as high as $1449, other OEMs would be much comfortable to increase their prices as these prices become the norm.