How much does the iPhone 14 cost Apple to make?
A new report from Counterpoint Research today offers a look at how much it costs Apple to make the iPhone 14 Pro Max. According to the data, the so-called “blended bill of materials” cost for this year’s flagship with 128GB of storage comes in at $464, a slight increase compared to last year’s iPhone 13 Pro Max…
How much does the iPhone 14 Pro Max cost Apple to make?
While Apple doesn’t disclose its profit margins or production costs on a per-device basis, it does report its overall products’ gross margin. In Q1 2023, for instance, Apple said that its products’ gross margin was 37%. This number is historically very stable for Apple, with only very minor fluctuations.
The data from Counterpoint Research seen by 9to5Mac shows that the iPhone 14 Pro Max is roughly 3.4% more expensive for Apple to make than the iPhone 13 Pro Max. The primary reason for this increase is the new 48MP rear camera as well as the new always-on display.
Prices for certain components have also gone down this year, with one of the most notable price drops impacting cellular components. “Compared with that of its predecessor, the iPhone 14 Pro Max’s blended cellular group cost share dropped to 13% due to a fall in component prices as 5G cellular technology rises in popularity,” the report says.
Other tidbits worth noting from Counterpoint’s report on how much it costs Apple to make the iPhone 14 Pro Max:
- The A16 Bionic chip costs Apple around $11 more per unit than the A15 Bionic chip.
- The overall “processing” category, which includes the A16 Bionic chip, now accounts for 20% of the total materials cost.
- Apple’s self-designed components have a larger share in the overall BoM cost of the iPhone 14 Pro Max than in that of the iPhone 13 Pro Max. Apple’s self-designed components account for 22% of the overall BoM cost of the iPhone 14 Pro Max.
- Producing a 128GB iPhone 14 Pro Max mmWave smartphone costs Apple up to $474.
- Producing a sub-6GHz 128GB iPhone 14 Pro Max comes to $454.
As always, it’s important to keep the bigger picture in mind when looking at cost numbers like these.
Apple works closely with its suppliers and often finalizes component costs well ahead of time. These numbers also only cover materials and do not include other production costs like assembly, packaging, or distribution. Apple has, of course, spent huge amounts of money on research and development, sales, and marketing.
Nevertheless, it’s particularly interesting to see how these component costs fluctuate over time and how they impact Apple’s pricing for consumers. For instance, the iPhone 14 Pro Max costs the same as the iPhone 13 Pro Max, despite the slight price increase for components.
One of the most notable year-over-year cost increases, according to Counterpoint, came from the iPhone 11 to the iPhone 12. For that transition, component costs reportedly increased by a whopping 26% — primarily due to the 5G modems.
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