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© IHS Markit Analysis | November 08, 2017

BOM list shows that iPhone X costs Apple $370 in materials

IHS Markit’s teardown engineers brought out their tools and got to work on the new iPhone X. The team’s preliminary physical dissection of the new Apple flagship model shows a bill of materials (BOM) of $370.25.
IHS Markit has dissected – dismantled, disassembled or how ever you want to put it – the model A1865 version of the smartphone with 64 GB of NAND memory. And the new phone is a more expensive than its predecessors, both in retail and manufacturing cost.

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With a starting price of USD 999, the iPhone X is USD 50 more than the previous most expensive iPhone, the 8 Plus 256 GB. As another point of comparison, Samsung’s Galaxy S8 with 64 GB of NAND memory has a BOM of USD 302 and retails at around USD 720.

“The iPhone X is the most expensive iPhone ever made, and it has the highest retail price tag of comparable flagship phones, catapulting the smartphone industry to an entirely new price point,” Andrew Rassweiler, senior director of cost benchmarking services at IHS Markit. Says in a press release.

“While the iPhone X represents Apple’s biggest step forward in design since the iPhone’s debut in 2007, its underlying architecture is analogous to the iPhone 8 Plus,” Rassweiler said. “Both models share platform-common components, but the X’s superior screen and TrueDepth sensing set the phone apart and contribute to its higher cost.”

Based on the BOM cost and retail pricing, IHS Markit believes that Apple is maintaining its typical hardware margins for the iPhone X. That gross margin may increase over time as manufacturing yields improve.

The standout feature on the iPhone X is Face ID, a facial recognition system that takes the place of Touch ID for unlocking the phone and authenticating payments. Face ID is enabled by the TrueDepth sensing system, which is housed in the black “notch” at the top of the phone. An infrared (IR) camera projects and analyzes more than 30’000 invisible dots to create a precise depth map of a human face, and it employs machine learning to adapt to physical changes in appearance.

The teardown of the iPhone X revealed that its IR camera is supplied by Sony/Foxconn while the silicon is provided by ST Microelectronics. The flood illuminator is an IR emitter from Texas Instruments that’s assembled on top of an application-specific integrated circuit (ASIC) and single-photon avalanche diode (SPAD) detector from ST Microelectronics. Finisar and Philips manufacture the dot projector. IHS Markit puts the rollup BOM cost for the TrueDepth sensor cluster at USD 16.70.

Finally, the iPhone gets an edge-to-edge AMOLED display

For the iPhone X, Apple utilizes a 5.85-inch 19.5:9 aspect ratio active matrix organic light-emitting diode (AMOLED) panel with a Force Touch sensor beneath the polarizer film.

Sporting a 2436 x 1125 resolution, the “Super Retina” display features the highest pixel density (458 pixels per inch) and contrast ratio (1,000,000 to 1) ever in an iPhone. The panel is supplied by Samsung Display, and according to the IHS Markit AMOLED and Flexible Display Intelligence Service, the panel maker will supply around 67 million flexible AMOLED units to Apple in 2017 built to the company’s unique specifications.

“Apple’s use of AMOLED in its flagship smartphone is expected to evolve in the coming years — first by the removal of the notch in the display, and then to a smartphone/tablet combo form factor,” says David Hsieh, senior director for displays at IHS Markit..

IHS Markit estimates the cost of the display module, which includes the cover glass, AMOLED panel and Force Touch sensor, at USD 110.
More information can be found at © IHS Markit.

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November 14 2017 8:30 PM V8.8.9-1