Apple iPhone 15 Pro Max: 43% more expensive titanium frame and 280% more expensive telephoto camera bite into Apple's margin

After a "Bill of Materials" analysis recently showed that the production costs of the iPhone 15 and the iPhone 15 Pro are significantly higher than those of the direct predecessor models, analysts at Nikkei Asia have concluded that Apple is planning a price increase next year.

While the iPhone 15 series costs the same as the iPhone 14 series in the USA, the new flagships have even become cheaper in Germany due to the stronger euro. And this despite the fact that the iPhone 15 Pro Max, with production costs of US$558, is 12% more expensive to manufacture than its predecessor.

These higher costs are due to 1) the titanium frame, which at US$50 costs 43% more than the stainless steel frame of the iPhone 14 Pro Max; 2) the US$130 Apple A17 Pro, which costs 27% more than before due to TSMC's advanced 3 nm manufacturing process and; 3) the periscope telephoto camera, which is reported to cost US$30, 280% more than the telephoto camera of its predecessor.

Flash storage, on the other hand, has become cheaper over the past twelve months, so Apple is paying about the same for 256 GB of storage in the base model of the iPhone 15 Pro Max as it did for the 128 GB of the iPhone 14 Pro Max - one of the reasons why the new model starts with more storage, because with a 128 GB base model at the price of its predecessor, Apple's gross margin would have slumped even more.

As the smartphone market has already been struggling in 2023 due to macroeconomic circumstances such as high inflation, Apple appears to have refrained from raising the prices of the iPhone 15 series so as not to jeopardize sales. Nikkei Asia assumes, however, that the price increase will occur next year for the iPhone 16 instead.