iPhone 15 parts costs hit a new high, with especially steep price rises for the Pro Max model. The titanium frame cost Apple some 43% more than the stainless steel one used in last year’s model, while the cost of the 5x telephoto camera was three times higher than the 3x module.
A new report breaks down the component costs of the base model iPhone 15 Pro Max, and notes that Apple chose to absorb these higher costs rather than pass them on to consumers in the form of higher prices …
iPhone 15 parts costs
Nikkei Asia worked with Fomalhaut Techno Solutions to conduct teardowns, identify the key components, and come up with a decent estimate of the parts costs for each of the four models.
Using the 256GB version iPhone 15 Pro Max as an example, the total cost of all the parts was estimated at $558 – some 12% more than the components used in the equivalent iPhone 14 Pro Max. Here are a few examples:
- A17 Pro chip: $130 (+27%)
- Display: $115 (+10%)
- Frame: $50 (+43%)
- Telephoto camera: $30 (+280%)
Looking further back, at 2018 to 2021, the total parts bill for equivalent models ranged from $400 to $450, meaning that Apple has faced some stiff price rises across the past few years.
Apple did claw back costs on storage
While many parts cost Apple more this year, the cost of storage fell.
The prices of NAND flash memory chips used for internal storage have dropped due to weak demand. The lowest-priced model of the 15 Pro Max is equipped with 256 gigabytes of memory, twice that of the 14 Pro Max, but the cost was only 5% dearer.
Apple discontinued the 128-gigabyte model for the 15 Pro Max and set the minimum price at $1,199, a $100 uptick. As it took the wraps off the new iPhone 15 range at an event in September, Apple emphasized that the new entry point did not represent a price hike as the 2022 version of the Pro Max with the same amount of memory cost the same.
Despite the doubling of NAND flash memory, the cost remained pretty much the same.
Apple may increase prices for the iPhone 16
The report notes that Apple chose not to pass on the increased parts cost to consumers this year, which surprised some.
Analysts were surprised that Apple maintained the U.S. prices for its latest iPhones, except for the top-of-the-line model.
The pricing decisions seem to suggest that Apple’s management is cautious about price increases that might impact sales.
However, with parts prices likely continuing to increase, it’s suggested that we may see price rises for next year’s iPhone 16 line-up.
9to5Mac’s Take
One inevitable comment will be a sarcastic one about Apple’s margins, noting that even with parts costs of $558, Apple charges $1,199 for the model – an apparent profit of $641.
That of course isn’t actually the case. Even just looking at direct costs, Apple also has to pay for assembly and distribution, while there are a huge range of indirect costs. These include research and development, advertising and marketing, those very expensive Apple Stores, and all the other costs of running a large company. Inflation means that all those costs are increasing.
All the same, Apple isn’t exactly hurting. The analysts are likely right that Apple was playing safe, given consumers are paying more for everything from food to electricity, but if the company has proven one thing, it’s that people will pay what it takes to get their shiny new iPhones. I certainly wouldn’t be surprised to see $50 to $100 price hikes next year.
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