Nikkei Asia revealed that component prices for the latest iPhones have risen by 20%, reaching an all-time high. Production of the iPhone 14 Pro Max costs $ 501, a huge increase over its predecessor’s $ 461 cost, and the main reason is the A16 Bionic chip, which costs just $ 110.
Prices for the Pro Max model have varied between $ 400 and $ 450 since the model’s introduction in 2018, Nikkei wrote. The news website logically assumed that if Apple is taking a hit on manufacturing costs without touching its prices in the US, the company is likely to get a hit in profits.
The A16 Bionic chip costs 2.4 times more than its predecessor A15, which is also available in the two non-Pro models: iPhone 14 and iPhone 14 Plus. Another reason for the price increase is Sony’s new CMOS sensors, which are more 30% large but 50% more expensive, reaching a raw cost of $ 15. Apple is also buying its screens from Samsung Display, a deal that has been going on for several years.
Components for iPhone 14 devices from US-based companies account for nearly a third of the total cost and are up 10% compared to 2021. South Korea is the second largest supplier of phone components and the shift is mainly due to to Apple by developing its own products, such as the chipset.
China’s share has further shrunk as Cupertino seeks to limit dependence on the Asian market. Previous reports have revealed not only the parts, but the assembly process is moving out of the country as well. The teardown revealed that there are no additional hardware components for the emergency SOS function, because it is software-based, meaning it could reach more markets in the near future.
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