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iPhone X boosts Apple’s margin, costing only $50 more than 8 Plus

The iPhone X’s bill of materials (BOM) cost is about $370, signifying a healthy margin for Apple on its most expensive handset ever, which retails in the US for $999.

According to a teardown by IHS Markit, the 64GB model has a BOM bill of $370.25, about $50 more than the previous most expensive version, the iPhone 8 Plus 256GB; and almost $68 more than the Samsung Galaxy S8 with 64GB (which costs $302 and retails at around $720).

Andrew Rassweiler, senior director of cost benchmarking services at IHS Markit, said Apple has set a new “aspirational” price point for the smartphone sector. But some of its differentiating technologies come at surprisingly low cost. Its TrueDepth sensing feature uses a range of components and suppliers including the infrared camera that enables Face ID, but the whole cluster of elements costs only $17, the analysts say.

The most expensive element is the display module, which costs $110 including the cover glass, AMOLED panel and Force Touch sensor. By contrast, the memory costs $33.45 and the RF chips, which are at the heart of the battle with Qualcomm, come in at $18.

Rassweiler said that the iPhone X uses a similar underlying architecture to that of the iPhone 8 Plus. “Both models share platform-common components, but the X’s superior screen and TrueDepth sensing set the phone apart and contribute to its higher cost,” he commented.

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