It’s costing Apple more to make iPhones

The cost of material used to make the 64GB version of iPhone 8 and iPhone 8 Plus has slightly increased, compared to previous models. According to research firm IHS Markit, the estimated bill of material (BOM) of $247.51 for iPhone 8, and $288.08 for iPhone 8 Plus, “is the result of slower annual component cost erosion tied in with additional features.

The $247.51 BOM for iPhone 8 compares to $237.94 for iPhone 7 last year. The $288.08 BOM for iPhone 8 Plus compares to $270.88 for the iPhone 7 Plus last year. According to IHS Markit, “the biggest cost adders would be the increased NAND flash memory content and new wireless charging components.

This estimate, which only accounts for parts and excludes cost of R&D, manufacturing, software development, marketing, and shipping, represents about 35% of the iPhone 8’s $699 sale price, or 36% of the iPhone 8 Plus’ $799 sale price.

Interesting tidbits, compliments of Bloomberg:

  • The new camera system in iPhone 8 Plus costs $32.50
  • Screen and mechanical enclosures are the most expensive parts of iPhone 8 models
  • New controller used for inductive charging increases the cost by $2
  • The jump from 32Gb to 64GB as base storage costs Apple an extra $6
  • The A11 Bionic chip costs an extra $5 to make.

Tim Cook has in the past denounced these estimates as inaccurate, and although they should definitely not be taken as gospel, they do paint a rough picture of cost of parts to make an iPhone every year.

For a full breakdown, number nerds can refer to IHS’ full analysis.