A new ‘Bill of Materials’ analysis reveals that Apple’s top-end flagship, the iPhone 15 Pro Max, for this year costs just $37.7 extra to make compared to the iPhone 14 Pro Max, but there are multiple reasons for that. With memory and displays getting cheaper this year, the discounts eased Apple’s materials costs, but the new 3nm A17 Pro, titanium chassis, and camera system that includes a tetraprism telephoto lens increased the overall bill.
Memory and display reduced Apple’s ‘Bill of Materials’ cost by 30 percent
In an earlier analysis, it was reported that the iPhone 15 Pro Max cost $558 to produce, making it around 12 percent more expensive than the iPhone 14 Pro Max. According to Counterpoint Research, that difference is less pronounced, with the total just $37.7 higher compared to the ‘Bill of Materials’ for the iPhone 14 Pro Max. While some might conclude that a near-$40 additional cost should be nothing for Apple, remember that the technology giant mass produces millions of these in a single quarter.
The $37.7 additional cost is only for the components, and other expenses such as marketing, logistics, packaging, quality assurance, ‘out of warranty’ claims, and countless others have not been factored in. Even then, Apple is charging $100 extra for the iPhone 15 Pro Max while offering twice the base storage compared to the iPhone 14 Pro Max, with the new flagship coming with 256GB of internal memory right off the bat. As for the hardware that forced these cost increases, the new A17 Pro is now $30 more expensive than the A16 Bionic.
Additionally, the new camera system costs 34 percent more than the iPhone 14 Pro Max’s optics hardware, whereas the new titanium shell is 18 percent more expensive than the stainless steel chassis. As for where Apple managed to save on materials, DRAM and NAND memory costs have dropped by 30 percent, resulting in a $16.8 reduction compared to 2022. It is also likely that Apple’s dual-sourcing strategy of procuring panels from Samsung and LG helped lower the total.
TrendForce has previously said that the $1,199 starting price of the iPhone 15 Pro Max seems reasonable, and looking at the $37.7 extra that Apple has to pay for each of its 6.7-inch flagship units, some might argue that the additional $100 being charged to customers may be justified.
News Source: Counterpoint Research
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