Production of iPhone 14 costs 20% more than iPhone 13
Nikkei Asia revealed that component prices for the latest iPhones rose by 20% to hit an all-time high. The production iPhone 14 Pro Max costs $501, a huge increase over the $461 cost of its predecessor, and the main reason is the A16 Bionic chip, which alone costs $110.
Prices for the Pro Max model have ranged between $400 and $450 since the introduction of the model in 2018, Nikkei wrote. The news website made the logical assumption that if Apple takes a hit in production costs while not touching its US prices, the company is likely to take 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 up to 30% larger in size but 50% more expensive, reaching a raw price of $15. Apple also sources its displays from Samsung Display, a deal that has been in the works for several years.
Components for the iPhone 14 devices from US-based companies compromise almost a third of the total cost and have increased by 10% compared to 2021. South Korea is the second largest supplier of components for phones, and the shift is mainly due to Apple developing its own products, such as the chipset.
China’s share shrank even more as Cupertino tries to limit dependence on the Asian market. Earlier reports revealed not only parts, but the assembly process is also moving out of the country. The teardown revealed that there are no additional hardware components for the SOS emergency feature because it is software-based, meaning it could reach more markets in the near future.