- The iPhone 14 Pro costs Apple about $464, or about Rs 38,400, to make
- In comparison, after currency inflation adjustment, the iPhone 13 Pro cost around $447, or Rs 37,000
- The iPhone 14 Pro cost Rs 1,29,900 in India, while the iPhone 13 Pro cost Rs 1,19,900 at launch
Apple has seemingly incurred a higher gross bill of materials (BoM) cost in making its latest crop of ‘Pro’ iPhones. According to a research note taking into account the cost of core components sourced from supply chains by market researcher Counterpoint, the iPhone 14 Pro cost an average of $464 (around Rs 38,400) to make. In comparison, this was 3.7 percent more than the total BoM cost of the 2021 flagship, the iPhone 13 Pro — driven by aspects such as new processors, a better display, and a superior camera.
iPhone 14 Pro manufacturing cost
As per the research note, the iPhone 14 Pro’s higher cost came as a result of marginally higher outlays by Apple on the display, camera and processors front. This includes an $11 (around Rs 900) rise in cost of the processors, driven by the move from the 5nm A15 Bionic SoC, to the 4nm lithography process on the A16 Bionic. The new generation processor, which represents one of the most cutting-edge processor manufacturing standard in the commercial world at the moment, understandably cost Apple more to fabricate.
The other key contributor to the rise in the total BoM cost is the use of the 48MP primary camera module, which along with other algorithmic advances, led to a rise of $6.3 (around Rs 500) in the total cost of the making of the phone, in comparison to the iPhone 13 Pro.
As per Counterpoint, the display, camera and processor combined to account for 51 percent of the total cost of the iPhone 14 Pro, while the same for the iPhone 13 Pro was 47 percent.
How it reflected in real-world prices
To be sure, this was also reflected in real-world prices of the latest generation iPhone, in various parts of the world. While the iPhone 14 Pro cost the same as the 13 Pro in the US (at a starting price of $999 at launch), this was not the case in India. Here, the iPhone 14 Pro price started at Rs 1,29,900 for the 128GB storage variant, while the iPhone 13 Pro was priced at Rs 1,19,900 at launch time. This marks a price rise of 8.3 percent — which appears to offset the higher overall making cost.
It is important to note that the cost of cellular components for the iPhone 14 Pro was 13 percent lesser than that of the 13 Pro, and the overall cost of other miscellaneous components was also lesser. This was driven by a drop in pricing of 5G networking components, which became more mainstream, and thus more affordable, due to assembly scale. Such margin changes are common every year, and are driven typically by market dynamics in the supply chain due to supply rate, availability of components, and the level of sophistication required in making the components.
Diversification of supply chain
Counterpoint also noted that Apple has multiple suppliers for each component segment, and the BoM cost is an aggregate of the overall pricing that each offer the Cupertino company. For instance, Samsung is Apple’s primary display supplier, while Sony supplies the main camera sensor. However, three companies — GSEO, Largan and Sunny Optical are suppliers of the iPhone 14 Pro’s main camera lens. For cellular components, Apple’s suppliers include Broadcom, Qorvo, Qualcomm and Skyworks. In the chips division, Kioxia and SanDisk supply the NAND Flash storage media, while Micron, Samsung and SK Hynix supply the RAM modules.
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