Here’s how much it costs to make the new R24,000 iPhone

The teardowns and cost benchmarking team at IHS Markit has completed its preliminary physical review of the new Apple iPhone Xs Max.

The model A1921 version of the smartphone sold in North America comes with 64 gigabytes (GB) of NAND memory and carries a bill of materials (BOM) of $390 (R5,601) – which is just $20 (R287) higher than the BOM for last year’s smaller iPhone X.

With a starting price of $1,099 (R24,000 in South Africa), this year’s 6.5-inch iPhone Xs Max costs consumers $100 more than the last year’s 5.8-inch iPhone X – which launched at R20,499 in South Africa.

“Overall, the iPhone Xs Max represents an ‘s-year upgrade,’ whereby the physical smartphone design remains relatively unchanged from the previous iPhone X version released in 2017, but most of the core components have been upgraded,” said Wayne Lam, principal analyst for mobile devices and networks at IHS Markit.

“For example, SDRAM increased from 3 gigabytes last year to 4 gigabytes this year, the A12 applications processor features the latest 7 nanometer manufacturing by TSMC, and additional LTE band support has been added to the gigabit LTE radio-frequency front-end design.”

Apple’s premium iPhone strategy

Apple has created more iPhone options this year, while moving its whole portfolio further up into the premium segment.

“The company has completed its hardware design refresh that started with iPhone X, and has moved to an all-notch display line-up,” said Jusy Hong, research and analysis director, IHS Markit.

“Features like high-refresh-rate and high-dynamic-range OLED displays, computational photography and enhanced audio recording, and improved performance for artificial reality games and other offerings, re-enforce Apple’s focus on the user experience.”

The premium smartphone market segment increased drastically, after Apple released the iPhone 8, iPhone 8 Plus and iPhone X last year.

Shipment volume increased to 30.1 million and 69.8 million units in third quarter and fourth quarter of 2017, respectively, up from 16.5 million and 32.9 million in the same quarter a year earlier.

As a result, the global share of premium smartphone shipments increased to 18% in the fourth quarter of 2017, up from 8% in the fourth quarter of 2016.

Read: Here are the official iPhone Xs and Xs Max prices for South Africa

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Here’s how much it costs to make the new R24,000 iPhone