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© Apple Analysis | February 11, 2021

The cost of making an iPhone – a trip down memory lane

In the summer of 2007, Apple released its first iPhone. To be truthful, it turned the market on its head and rapidly climbed to the number 1 spot. Let’s look closer at six of the models and their cost of manufacturing.

In the summer of 2007, Apple released its first iPhone to the market. Since then 28 other versions of the Cupertino company’s smartphone have been released. Between the iPhone X and 11 there was a clear price hike. To get your hands on an iPhone, you had to dish out USD 549 and USD 749 respectively for the cheapest version of each model. But was that difference visible in the Bill of Materials of each of the phones? Evertiq reached out to TechInsights, an Ottawa-based provider of advanced technology analysis and intellectual property services, to take a deep dive into the bits and pieces of the iPhone that tally up the cost. We chose to look at six iPhone models, all released with more or less a year in between each, starting with the 6s released in 2015 and ending with the iPhone 12 Pro released in 2020. Going through the teardown of the phones, it becomes clear that certain subsystems have – understandably – increased significantly in cost over the years as specific features have gotten more and more into focus and risen in popularity. But before we go into the cost metrics and the manufacturing cost breakdown, let's look at the IC die count development for these models.
iPhone 6siPhone 7iPhone 8iPhone XsiPhone 11 Pro MaxiPhone 12 Pro
IC die count102130129138152189
IC package count5987839597130
Includes all the subsystems While not entirely surprising, the data provided by TechInsights shows that the intricacy of the phones have increased with each model. The models that we chose for this comparison were released to the market with retail prices ranging from USD 799 to USD 1449 and the increases in retail price, doesn’t necessarily match the changes in total cost of manufacturing for each model. As stated earlier, certain subsystems have seen significant cost jumps from model to model. Others, while they have increased in cost, remain the cheapest subsystem in general; such as the battery subsystem. Let's have a look at the costs of some of the key components for these models.
iPhone 6siPhone 7iPhone 8iPhone XsiPhone 11 Pro MaxiPhone 12 Pro
Integrated circuits$177,06$176,05$160,50$147,97$209,66$235,97
Modules, Discretes & Connectors$14,48$18,88$17,71$24,16$24,72$32,66
Display/Touchscreen subsystems$53,82$44,35$46,43$93,16$55,88$47,18
Camera subsystems$22,77$32,78$34,18$58,32$82,13$84,71
Battery Subsystem$6,63$7,31$4,54$8,14$14,34$9,13
The increase in cost for the camera subsystems stands out. From an increase of less than two dollars between the iPhone 7 and 8 to a jump of more than USD 20 moving to the Xs and then a further increase of USD 20 moving to the 11 Pro Max. However, these increases are somewhat self-explanatory. The Xs had an updated Face ID hardware consisting of a sensor with three modules and the 11 Pro Max came with a triple lens camera. So, utilising the data from TechInsights teardowns, this is the final picture when all the bits and pieces are put together.
iPhone 6siPhone 7iPhone 8iPhone XsiPhone 11 Pro MaxiPhone 12 Pro
Retail Price$949,99$969,00$799,00$1 099,00$1 449,00$1 099,00
Total Manufacturing Cost*$316,89$326,60$318,13$425,13$487,44$540,21
Electronics Cost**$234,22 $246,71$235,73$268,24$329,33$373,73
*Excluding Supporting Materials' Cost **Including Subsystems From this we can draw several conclusions, using both the data and information previously uncovered relating to the manufacturing of the iPhones. The complexity to manufacture and assemble the phones has increased and driven up the cost. One specific thing that comes to mind is the reported difficulty to automate the assembly of the face recognition modules. This leaves manufacturers with only one option; to increase their headcount and insert the module manually. Secondly, the layered complexity and increased performance of the iPhones as well as the addition of new or updated features have added to the cost of the electronics.
TechInsights provided all the IC and cost metrics, as well as the manufacturing cost breakdown for this article.
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February 12 2021 10:46 am V18.15.24-1