iPhone 14 Pro Max is giving Apple the worst profit margin ever

iphone 14 pro max giving worst profit margin ever

Apple didn’t raise the value of its iPhone 14 series models, but it doesn’t feel bad for its bottom line as the line comes with a higher average selling price than the iPhone 13 series, to replace the deprecated iPhone 14 Plus. Thanks, mini model.

Apple managed to hit the mini form factor to reach a $3796 average selling price but replaced it with a larger but “affordable” $899 iPhone 14 Plus. In addition, it created such a huge specs gap between the Pro versions and the regular iPhone 14 that its previous bestsellers are slashing sales due to a huge slant for the Pro versions, of which the iPhone 14 Pro Max, specifically accounts for 60%. Share.

How much does it cost to make an iphone 14 Pro Max?

However, if you think Apple is killing off the iPhone 14 Pro Max, the original non-Pro model, that’s not the case.

According to the team, which calculates its bill of materials (BOM) cost, or the total cost of the components and assemblies involved to build it, in addition to R&D expenses and marketing and distribution efforts, the iPhone 14 Pro Max’s parts cost at launch. 20% more than the iPhone 13 Pro Max.

This is pretty surprising, considering that the new 4nm Apple A16 processor inside it, is expected to cost a whopping $110, there are also new cameras that cost 50% more than the previous sensor, as well as the latest Samsung panel with 12th-gen OLED technology allows Apple to claim the “brightest phone screen” in marketing materials.

Tucking more RAM, satellite connectivity, and a Face ID module into the display cutout, and iPhone 14 Pro Max components now cost $501 — an all-time high for an Apple handset — considering that the Max model is $400-$450. have hovered in the cost limits to build since the inception of the line.

Accordingly, Apple has no choice but to resort to the strategy of mounting high-performance devices to differentiate itself as it can no longer compete on new functions.

Android phone makers are already on things like 10x periscope zoom, which are just as expensive as components, so Apple had to give the camera department some bumps if it wanted to stay in the specs game. Android flagships have also had super bright HDR displays with grainy dynamic refresh rates for some time, so Apple reluctantly chimed the iPhone 14 Pro Max’s specs sheet in that direction as well.

While this did not raise the price of the Pro models in the US, even though they cost a lot more than their typical BOM, Apple increased them globally. This was mostly attributable to the stronger dollar and compensated for the new exchange rate, however, in the US, according to teardown analysts, it is only eating up the difference in profit margins.

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