For those who like to comment without reading the post :/
The figures from TD Cowen say that a 256GB iPhone 16 Pro Max costs Apple about $485 to manufacture, including the components, box, and assembly process. By comparison, the iPhone 15 Pro Max had a so-called Bill of Materials (BOM) of $453, about $32 cheaper than the newer model.
Standard markup is about 100% on electronics from the bom cost, but things on a closed ecosystem that are supposed to make their money back in software and service licensing or normally so close to the cost. On something like a game console you are looking at a 10 to 15% mark up at retail. The wholesale price is very close to the bill of materials. The only company that really sticks out is Nintendo who sells at a 15 to 20% markup wholesale and then never lowers the price.
The really insulting thing about how Apple does it is the they add a 500 to 1000% mark up for storage ram upgrades. They even kept using 8 GB on the MacBooks when it was cheaper to run 12 or 16 GB ram ICS for the package size they were using.
The ic package Apple was using was supposed to be deprecated but Apple kept using it. The 12GB module that fits the same pin array was about 50 cents cheaper last year when the M3 launched. That could be since Apple bought all the packages or it could just be Apple scamming people. The package you need for 16 GB of RAM was also less than $5 more than the 8GB
So what? $20 to make?
For those who like to comment without reading the post :/
And let’s not forget R&D costs or other investments (e.g. stores).
I’m no way defending them, they make a shitload of money on each phone, but they are still very expensive to make.
Standard markup is about 100% on electronics from the bom cost, but things on a closed ecosystem that are supposed to make their money back in software and service licensing or normally so close to the cost. On something like a game console you are looking at a 10 to 15% mark up at retail. The wholesale price is very close to the bill of materials. The only company that really sticks out is Nintendo who sells at a 15 to 20% markup wholesale and then never lowers the price.
The really insulting thing about how Apple does it is the they add a 500 to 1000% mark up for storage ram upgrades. They even kept using 8 GB on the MacBooks when it was cheaper to run 12 or 16 GB ram ICS for the package size they were using.
Wait, where did you find out that 8GB of ram is more expensive to manufacture?
The ic package Apple was using was supposed to be deprecated but Apple kept using it. The 12GB module that fits the same pin array was about 50 cents cheaper last year when the M3 launched. That could be since Apple bought all the packages or it could just be Apple scamming people. The package you need for 16 GB of RAM was also less than $5 more than the 8GB
What? Each phone costs them hundreds of dollars to make. The profit margin is still large, but phones are not cheap to make.
If they’re not factoring R&D into the prices they’re doing it wrong.
Some bumpkins would just calculate what the phone should be because of the cost of the components and not figure anything else into that.
It’s Apple. Of course they’re not doing it wrong.
The stress from the extra complexity requires additional suicide nets.