As iPhone XS Teardowns Abound, Here's How Much Building iPhones Really Costs
A teardown of the phablet reveals some, but not all.
The sum of the iPhone XS Max’s parts is estimated to cost about a third of its retail cost.
On Tuesday, Apple’s new flagship phablet was stripped down to its raw components, and the resulting analysis revealed that its insides and chassis cost the tech company roughly $443 per unit. That’s up from the iPhone X’s $357 teardown rating. Each year the Canadian firm TechInsights has traditionally torn apart the first new iPhone it could get its hands on to produce these figures.
The tech analysis company broke into a 256-gigabyte XS Max, which is priced at $1,249. That’s a 64.5 percent gross profit margin, without taking the cost of labor or R&D into account. That’s about the same as the iPhone X’s estimated gross profit margin of 64.3 percent, based on TechInsights’ findings last year.
The XS Max’s costliest component was determined to be the 6.5-inch OLED display that clocks in at $80.50 per phone. The cost of the iPhone X’s 5.8-inch OLED screen was approximately $77.27.
The insides of an iPhone XS Max.
While laying bare what the XS Max is hiding inside has become custom for this time of the year, Apple CEO Tim Cook has spoken out about the accuracy of these teardowns.
“Generally there are cost breakdowns around our products that are much different than the reality,” he said during the company’s second-quarter earnings call in 2015. “I’ve never seen one that is anywhere close to being accurate.”
The iPhone X’s actual profit margins are up to debate. Andy Hargreaves of KeyBanc Capital Market, estimates that after taking into account the price of labor the iPhone X costs Apple $552 to manufacture. That’s almost $200 more than the TechInsights teardown for that year, a margin of 46 percent.
It’s safe to assume iPhone XS Max sales are netting Apple a pretty penny, even if it likely costs much more to fully construct one than the teardown will have you believe.
