iPhone 15's Record High Production Costs Could Push Up iPhone 16 Prices

[128KMac]

Interesting use of percentages. If you do the math, the camera and frame price increases were each around $22.00, whereas the chip increase, although the lowest percentage quoted, was about a $35 increase. And those three items add up to a bit more than the approximately $68 increase in the overall product, suggesting some savings on other components.

 

[2540497]

Nah, don’t believe it. Sorry.

 

[iPay]

[...]
I don’t understand why people forget that they are more expensive phones than the iPhone with no reason to be more expensive.

You might be surprised, but I've heard more than once people complaining that Apple doesn't make the topnotch (easy pun), top-price phone they would be proud to buy and show around. They could pay more for the absolut best phone, but see Apple trailing in tech and style (Flip, Fold etc). Maybe that's why Apple is teasing an Ultra; it can be pricey but has to be top-tier, don't know if Apple still can deliver.

 

[dampfnudel]

He forgot to count in the lower cost of upcoming Soc A18/Pro with N3E process which comes with lower BOM

That’s what I call a win-win for Apple. Raise prices and get parts at a lower cost. I’m guessing the A18/A18 Pro/M4? will find itself in many Apple devices while the higher cost A17 Pro manufactured on the N3B process will be “exclusive” to the 15 Pro/Pro Max.

 

[6787872]

timmy the uninspired fool

 

[Gathomblipoob]

Quick, guys - we gotta come up with some bad news about the next iPhone. More expensive? That'll do!

 

[ohthehorror]

Shock, horror. Apple products are expensive. Who knew. Moving right along. Next non-story.

 

[iPay]

$3 trillion dollar company can afford to absorb the cost.

Also stop wasting money on crap research project like Vision Pro and the rumoured car. Vision Pro is dead out the gate and god knows how much cash was wasted on car research.

Like Mother Nature likes to say, trillions don't grow on trees. In a way, the Tim Cook era is the triumph of the "double the memory from tight to decent, quadruple the price" strategy.

 

[ifxf]

God forbid Apple only make 40% or 45% profit margin on these devices…

That margin doesn’t include things like the serial returners, Apple store overhead, etc.

 

[Someyoungguy]

That margin doesn’t include things like the serial returners, Apple store overhead, etc.

But Net Profit Margin includes everything, and in the most recent quarter that stood at 24.68%. It was less than 23% for most of the last decade, so yea, they can abosrb the $30 camera.

 

[HMI]

Fascinating! Will the record high production costs of the iPhone 16 also push up the iPhone 17 prices? I can't wait to find out!

 

[lordofthereef]

Another year of this huh? How many more years you gonna predict a price increase before you’re finally right?

This year was technically correct too, they just made consumers feel better by "giving" them 256 gig base on the pro max. The pro max is the single best selling unit of the generation year over year, so they get to subsidize the costs for everyone else. It's just excellent marketing the 99.9% of buyers never notice. Not even a criticism. It's genius.

 

[mnsportsgeek]

This year was technically correct too, they just made consumers feel better by "giving" them 256 gig base on the pro max. The pro max is the single best selling unit of the generation year over year, so they get to subsidize the costs for everyone else. It's just excellent marketing the 99.9% of buyers never notice. Not even a criticism. It's genius.

They just dropped 128gb option entirely. Ya it’s clever marketing but technically no change in price between 256gb 14 pro max and 15 pro max.

 

[Ethosik]

Weren't there like 3-5 rumors that the iPhone 15 will be higher price?

 

[Premium1]

Starting that "higher prices for next years model" early this year it seems. Not like Apple isn't already making a killing on the phones anyway.

 

[sjperformance]

This doesn't surprise me one bit. If you haven't noticed everything cost more now a days. Next story.

 

[gaximus]

God forbid Apple only make 40% or 45% profit margin on these devices…

Did yours just come unassembled in an unlabeled box? Mine came in a nice box all assembled by someone, with software and services, and has customer support. (not to consider all the designing, for those parts) those prices are just the hardware.
Apple still has high margins, but if any other company had 12% cut out of their margins, it would make the product infeasible to manufacture, with passing that increase to the customer.

 

[R2DHue]

The iPhone 15's production costs are appreciably higher than those of last year's iPhone 14 models, marking record high component prices that Apple could pass onto customers in 2024, Nikkei Asia reports.

The iPhone 15 Pro Max is calculated to cost $558, a 12% increase over the iPhone 14 Pro Max model released in 2022. This is a record high for the total cost of an iPhone's components. From 2018 to 2021, the total cost of parts for Apple's iPhone "Pro Max" models ranged from $400 to $450. Component costs rose around 20% in 2022 before reaching today's record high of $558.

The cost of the iPhone 15 Pro Max's telephoto camera now stands at $30, a 380% increase over the previous model. Likewise, the titanium frame costs $50, a 43% increase over the stainless steel frame of previous devices. The A17 Pro chip comes in at $130, a 27% increase over the A16 Bionic chip.

The other models in the iPhone 15 lineup are also not immune to cost increases. The standard iPhone 15's components come in at $423, a 16% increase compared to the iPhone 14. The iPhone 15 Plus is calculated at $442, a 10% increase over its predecessor, while the iPhone 15 Pro grew by 8% to $523.

Despite increased costs, Apple did not increase the retail prices of any of its iPhone models this year and chose to absorb the impact of increased expenses. The only notable change was the discontinuation of the 128GB Pro Max model, meaning that users who normally purchased the 128GB model now have to pay $100 more to obtain the device.

In collaboration with Nikkei, Tokyo-based research company Fomalhaut Techno Solutions believes that if Apple continues to absorb the impact of increased production costs, its bottom line will soon take a hit. As a result, Apple may finally choose to hike iPhone retail prices upon the launch of next year's iPhone 16 lineup.

Article Link: iPhone 15's Record High Production Costs Could Push Up iPhone 16 Prices

People SCREECH at me for making this observation, but…

I’m still seeing a variety of benchmarks showing the iPhone 15 Pro outpacing the iPhone 15 Pro Max.

I’ll probably get flamed 🔥 no matter what I say, but, if it’s true that the iPhone 15 Pro is faster than the iPhone 15 Pro Max on average, I have a theory as to why that might be true:

SSD modules are known for getting BOILING hot! (It makes me wonder: which can get hotter, the SoC or the SSD?)

The base model iPhone 15 Pro comes with 128GB of SSD storage, but the base model iPhone 15 Pro Max comes with 256GB of SSD storage.

And if SSDs get as hot reports say, (as high as 185° Fahrenheit in some instances! ) it could be the case that the 256GB iPhone 15 Pro Max engages in thermal throttling sooner and more so than a 128GB iPhone 15 Pro — if those are the two model configurations being compared in the relevant benchmarks.

A truer comparison between the two phone models would be a 256GB iPhone 15 Pro vs. a 256GB iPhone 15 Pro Max (or the same storage tiers from 256GB to 1TB).

In such comparisons, the Pro Max might run significantly faster than the 15 Pro if Apple used the overall larger size of the Pro Max for more and better heat dissipation.

The iPhone 15 Pro with 1TB packed in its smaller size should make it run appreciably slower than the larger 1TB iPhone 15 Pro Max.

Still, with the 15 Pro Max, you’d think Apple could’ve found the room to squeeze a strip of thermal tape or something in there with that extra space somewhere — especially in the larger chassis 6.7-inch display 15 Pro Max… 🤔

I’d be interested to know if iPhone 15 Pro Max can be opened up and a place can be found for a little thermal tape somewhere that won’t make it too fat to close (when microns count), won’t interfere with the wireless charging coil, won’t make it otherwise malfunction or won’t make the situation worse!

(But…the all-knowing iOS would probably still show a pop-up afterward that reads, “Soooo. You put a piece of thermal tape inside me didja? 🧐”)

 

[Abazigal]

But Net Profit Margin includes everything, and in the most recent quarter that stood at 24.68%. It was less than 23% for most of the last decade, so yea, they can abosrb the $30 camera.

Ah yes, the eternal debate between “could” and “should”.

 

[R2DHue]

This year was technically correct too, they just made consumers feel better by "giving" them 256 gig base on the pro max. The pro max is the single best selling unit of the generation year over year, so they get to subsidize the costs for everyone else. It's just excellent marketing the 99.9% of buyers never notice. Not even a criticism. It's genius.

Yes.

The Pro Max models cost the most.

And are the highest selling by unit sales every year.

(Hey, people are willing to pay 💵 for “better.”)

(Which, btw, sorta bolsters my post about how Apple should cull the iPhone model lineup. People aren’t gonna ditch Apple for Android just because the $100 cheaper iPhone 13 isn’t sold anymore! )

And if the iPhone 13 hanging around causes its new buyers to have a suboptimal User Experience relative to the latest, best phone models (of any brand) — and owners keep it for a year or two — it’ll quickly start to suck, and Apple could actually be hurting its rep, and ultimately, its sales…

(Have some guts, Apple! Ditch the 13! Besides! People with triskaidekaphobia don’t buy them as it is!)

 

[yustas]

Nobody asked for Titanium from Mars, use aluminum, it's better at heat dissipation and is lighter.
Nobody asked for rounded corners that make the 15 more fragile; probably 95% of people use a case anyway.

 

[thelookingglass]

That margin doesn’t include things like the serial returners, Apple store overhead, etc.

Serial returns? Apple products? Never!

 

[Mr. Dee]

Please, don't give them any ideas. Next year is my upgrade year and I want to actually afford it.

 

[anthogag]

I envision Apple raising prices when all-new next generation iPhones arrive. A flippin-foldin iPhone could be $2,000.

 

[iBreatheApple]

I enjoy Apple but corporate greed in general is insane. Last year they earned a reported 70 BILLION *MORE* than they did just two years ago in 2020 according to Dr. Google. 170 BILLION dollars PROFIT. Every year it goes up up and up. Why push this cost increase off on the consumer? This is “just how the world works” but it is so ridiculous.