Analytic firm estimates component costs of the iPhone 8 and 8 Plus to be just over a third of their retail prices
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It's iPhone season again, which is synonymous with various analytic outlets trying to estimate the production costs of the new devices. Last week, we had a report by Chinese service ichunt.com that estimated the new iPhone X to have a total component cost of about US$412. This time, though, it's IHS Markit with a report on the production costs of the iPhone 8 and iPhone 8 Plus, with both coming in at $247.51 and $288.08 respectively.
As with the iPhone X, the most expensive component in the iPhone 8 Plus is the 5.5-inch FHD LCD display, which costs US$52.5, making it much cheaper than the estimated US$80 5.8-inch OLED display on the iPhone X. The chassis comes in second at US$50.9, and the cameras third at US$32.9. Interestingly, the memory pack (RAM + Storage) costs just US$31, which raises questions as to the large differential between variant prices.
Total product cost of the iPhone 8 Plus totals US$295.44, which is just about 37% of its US$800 retail price tag. This production cost, of course, doesn't account for R&D, marketing, and other such expenses but it does throw light on the hard figures behind the devices. All of this considered, it's no surprise, then, that Apple has the highest profit margins on its smartphones.