Sign Up
..... Connect Australia with the world.
Categories

Posted: 2017-11-07 00:22:58

Apple's new flagship iPhone X makes the company more money per phone than its iPhone 8 model, according to an analysis, which found the iPhone X's flashier parts cost Apple 25 per cent more than the iPhone 8, but that it retailed 43 per cent higher.

The iPhone X costs $US357.50 ($465) to make and sells in the US for $US999, giving it a gross margin of 64 per cent in that country, according to TechInsights, a firm that tears down technology devices and analyses the parts inside. 

Apple stock hits record

Apple stock surged as customers lined up to buy the new iPhone X in Apple stores around the world.

In Australia, where the iPhone X starts at $1579, the margin would be around 70 per cent using the same cost estimate from TechInsights. Not accounted for in the analysis is the cost of development, marketing, shipping and other considerations, but of particular note is that the iPhone X margin is higher than that of the last iPhone.

The iPhone 8 sells in the US for $US699 and has a gross margin of 59 per cent.

The finding is surprising because technology products tend to become more profitable as they age and the parts for them drop in cost.

The iPhone X is a brand new design that went on sale last week, to apparently strong demand, while the iPhone 8 is an update on last year's iPhone 7, which itself was similar to the iPhone 6 released in 2014.

Apple declined to comment on TechInsights' analysis.

Apple is unique in the electronics industry for its ability to charge a premium price for its latest devices and for its ability to maintain that price even when selling devices through third parties like telco carriers, said Al Cowsky, the costing analyst for TechInsights, which plans to post the results to its site.

"Apple can be different here because they are the 800-pound gorilla," Cowsky said.

Several of Apple's design choices for the iPhone X pushed up its price. In particular, its 5.8-inch edge-to-edge display and associated parts cost $US65.50, compared with $US36 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 colours and a thinner overall design.

Another pricey choice was the stainless steel chassis of the iPhone X, which cost $US36 versus $US21.50 for the aluminum housing of the iPhone 8. Cowsky said the steel is less likely than aluminum to bend when flexed, a problem that dogged the iPhone 6 when it came out.

"This is their lesson learned from that," he said. 

Reuters, with Fairfax Media

View More
  • 0 Comment(s)
Captcha Challenge
Reload Image
Type in the verification code above