Nikkei has recently published a report by Japanese teardown experts, Fomalhaut Techno Solutions, on the manufacturing cost of the iPhone 12 and 12 Pro models of the new flagship smartphone series. Although the new iPhones are packed with new hardware and technology, their price is high. The iPhone 12 retails for $829 and 12 Pro sells at $999.
In a new flat-edged design, the latest flagship iPhone models feature faster Face ID, more efficient A14 chip technology, and 5G connectivity. In the United States, all iPhone 12 models support both mmWave and sub-6GHz 5G networks, while in other countries, only sub-6GHz 5G connectivity is available. The 6.1-inch and 6.7-inch Pro models feature a triple-lens camera with a LiDAR Scanner that improves AR functionality and allows users to take Night mode portraits.
iPhone 12 and 12 Pro material cost is up to $406
It is reported that the iPhone 12’s materials cost approximately $373 while that of the iPhone 12 Pro is $406. This between the iPhone 12′ retails and manufacturing difference is $326 and 12 Pro’s difference is $593. However, it must be kept in mind that the difference does not mean that the amount is going directly into the tech giant’s profit margin. A huge amount of the profit made by the money goes into marketing, transport, taxes, certifications, and more.
Also, it is mentioned that the company has used two most expensive components in the latest iPhones: Samsung’s OLED displays and Qualcomm’s X55 5G modem. Samsung display is estimated at $70 per unit. The OLED displays provide users with improved image quality and lower battery consumption.
Qualcomm’s modem is estimated at $90 per unit. In addition, the production cost of the A14 Bionic is estimated to be $40. The A14 Bionic chip delivers a 50% faster CPU and GPU performance than “any fastest competing smartphone chip”. The power-efficient A14 Bionic enables computational photography, console-quality gaming, and more.
Some other expensive parts include the RAM at $12.8 per unit and flash memory at $19.2 per unit. Sony’s camera sensors that power the smartphone’s camera range from $7.4 to $7.9 for each unit. All models of the new flagship iPhone series feature Ultra Wide and Wide lens but the Pro models also include a Telephoto lens, bigger sensor and LiDAR scanner. In addition, the smartphones are shipped with 2x durable display glass with Ceramic Sheild protection which also would have impacted the cost.
According to the report, an estimated 26.8% of the iPhone 12 Pro components come from South Korea, which 21.9% comes from the US, 13.6% from Japan, 11.1% from Taiwan, 4.6% from China, and the rest from Europe and others.