Production cost of the Apple iPhone is estimated to have reached an all-time high according to Nikkei Asia.
A teardown of the Apple iPhone 14 flagship models reveals that components prices went up by 20%. Production of the iPhone 14 Pro Max is estimated to cost $501 compared to the $461cost of the iPhone 13 Pro Max.
The most expensive component is the $110 A16 chipset. The new Sony CMOS sensors, which are 30% bigger and 50% more expensive costs $15. The OLED display is likely to cost a lot more as it is reportedly using higher grade materials.
According to Nikkei Asia's research data, the production costs of the iPhone Pro Max models ranged between $400 and $450 since 2018. With the huge spike in component costs, it is likely that Apple's profit margins will take a significant hit.
Despite the surge in component prices, Apple has maintained the prices of its iPhone 14 models. This could change next year as Apple reportedly agreed to TSMC's chip price hike. Nikkei Asia reported last year that consumers should be prepared to pay more for smartphones, tablets, laptops and computers in the near future due to the ongoing global component shortage.
Source: Nikkei Asia via GSMArena