What is The Actual Cost of Manufacturing iPhone 11 in 2019

Published by Aditya Agarwal on

The Tim Cook’s team’s hardwo in Apple for past 1 year was presented in the form of the 3 new iPhones. After a lot of time, Apple saw a rise in the sales of iPhones. But what is the actual cost of manufacturing iPhone 11 in 2019.

Well we go deep down, we will try to estimate the actual profit margins, which Apple earns. This would include, the software costs, hardware costs and money spent in research and development.

How Much Does it cost to make the hardware of the new iPhones. The new iPhones have one of there one of the most expensive parts as a whole in the form of the storage and casing costing a total about $160. the new cameras, they cost approximately $72.50 to put in per every iPhone. They are really impressive and the cost can be considered justified.

The iPhones have done really great job in the terms of cameras this year. The lead they had in terms of technology had slowly vanished in the tale of time, but now Apple seems to again have got the crown for best camera with the impressive interplay of hardware and software.

iPhones this year are having a IP68 water resistance, but Apple has actually tested it for about 4 feet. Which must having required extra sealing and extra adhesives to make it all happen.

Besides the Liquid Retina Pro Display of the new iPhones, approximately costs about $67 I don’t have the exact values, but knowing that last year the display costed about $80, we take it to be the same this year. Though I still think, that they might have reduced the overall costs for the displays, because they removed the 3D Touch

The new powerful A13 Bionic chip is about $75, this cost includes the cost for the networking and various other systems also. They have introduced a new U1 chip that improves Airdrop and improves file sharing. We have no estimate for the cost of the U1 chip, but we assume it’s price to be around $20.

There chip as always is industry leader, with gigantic lead in performance as compared to its competitors. Though it’s sad to say, that Apple this year did not present any 5G variant for there phone.

This makes the actual cost of the manufacture just shy of $500 mark. And don’t start to blame Apple to be “over expensive”. The story till here is just a part of the total economics of the new iPhones.

The total cost of phone is not just the manufacturing cost. Apple spends a lot of money for research and development, it has its advertising budget.

It pays a lot of employees for the sale, and then many coders work throughout the year to develop better software, and make it a complete package. These costs are not included in the main costs of manufacture, but they definitely add up. Therefore we need to take it into account.

Apple spends around $10 Billion on Research and Development every year. That’s a huge amount. A good portion for this must be spent on development and designing the new iPhones also.

They have there own processors, and they design there chips all on there own, they manufacture custom chips as required by there latest iterations of iPhones.

Even though Jony Ive, one of the greatest designers of Apple is leaving the company but still Apple puts really good amount of attention to design, with lot of prototypes and models.

Apple has special teams for the development of iOS, and many other software. Apple makes apps exclusive to all of there devices, meaning that they have really great user experience thought they increase the costs.

Apple, spends a lot in making and maintaining its Apple Stores, unlike most of the companies they make the buying experience really great. They spend a lot in making fascinating good Stores.

Apple has a lot of coders who work on the basic user experience and design language. They work really hard to integrate camera software, for an all round experience.

They have there cloud services and various other services like App Store and music, for which they need to maintain a large server space in dedication to support all the functionality.

They unlike #Android devices, have worked really hard for privacy. While many apps on Android violate your privacy, and many apps show annoying ads. Apple takes extra measure to make it correct, and while on Android you would have to pay for removing ads, Apple ensures that doesn’t happen.

Apple’s costs also go into accessories. Yes they are not the best, and yes giving a slow charger when phone is capable of fast charging doesn’t seem right.

#Apple includes there wired Lighting Port based earphones, which are not as good as airpods, bit surely they work really great, and this adds extra cost.

Another major non #hardware reason why #iPhone total cost sums up to the $1000 price point is, the fact that they provide software updates for really long time. Yes the software may look same accross all devices.

But every old phone requires it’s own unique effort to ensure that the software runs properly, this keeps your phone in decently good condition even after a few years.

 

Thanks for Reading
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Aditya Agarwal

Aditya Agarwal

Indefinite Thinker Infinite Player 5th October, 2019

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