And all iPhones in circulation today started life in China, making their way out of the country on specially designed planes before being delivered to depots around the world for distribution. Interesting fact: Apple has the production capacity to make up to 500,000 iPhones per day in China. It just wasn’t worth it anymore from a business perspective. Technology companies that produce hardware and software like Apple have to shoulder BILLIONS in cost before they’re even remotely close to making some profit – this is why so many companies – LG, for instance – ducked out of the market. It doesn’t factor in Apple’s other costs which include paying its staff, it employs tens of thousands of highly skilled people, marketing and sales cost, technology costs of running a company the size of Apple, and, of course, its R&D budget which is used to develop new products and software like Apple’s Find My App and its new M1 processor.Īs barriers to entry into a market go, they really do get any higher than what Apple does. Sensors, Holding Material, Assembly, and Other: $181īut that’s just the raw cost of making the phone.Here’s a quick breakdown of the component costs of the iPhone 11 Pro Max, a phone that retails for over $1000 in all cases. But there is more to an iPhone than its components – a lot more! Big margins mean big profits, especially if you’re shifting as many products as Apple does. That’s quite a tidy profit, right? As profit margins go, this is where you want to be if you’re a tech company. And that phone retails for the princely sum of either $1099 or $1449, depending on the storage. From a components perspective, it’s actually not that much: around $500 for the iPhone 11 Pro Max. How Much Does It Cost To Make iPhones?īut how much does it actually cost to make an iPhone? As always, this is a loaded question. But it is nothing compared to what it makes with its iPhone. Sure, Apple makes money on its wearables, tablets, and computers. And Apple’s profits are utterly insane – it made $81.4 billion in revenue during Q1 2021 and a quarterly profit of $21.7 billion.Īnd the chief driving force behind its massive quarterly profits, as always, is iPhone – this is Apple’s cash cow and has been for over a decade. It spends money and it makes money the difference between what it spends (costs) and what it makes is called profits. Thanks, Apple!Īpple, like all businesses, operates on profit margins. The iPhone X was the first phone to break to $1000 barrier, for instance, setting off a chain of events that saw the average price of a flagship phone skyrocket over the next couple of years. How much does Apple make on its iPhones? And, more importantly, how much does it cost to make an iPhone? Here’s everything you need to know – from component costs to R&D and everything else in between…Įverybody knows that Apple’s iPhones are expensive.
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