iphone 14 pro manufacturing cost
As per the research note, the higher cost of the iPhone 14 Pro resulted from marginally higher outlay by Apple on the display, camera and processor front. This includes an increase in the cost of the processor by $11 (roughly Rs. 900), from the 5nm A15 Bionic SoC to the A16 Bionic powered by a 4nm lithography process. The new generation processor, which represents one of the most cutting-edge processor manufacturing standards in the business world at the moment, apparently cost Apple more to make.
The other major contributor to the increase in total BoM cost is the use of a 48MP primary camera module, which along with other algorithmic advances, increased the overall cost of manufacturing the phone by $6.3 (roughly Rs. 500). , compared to the iPhone 13 Pro.
According to Counterpoint, the display, camera, and processor combined account for 51 percent of the total cost of the iPhone 14 Pro, compared to 47 percent for the iPhone 13 Pro.
How is this reflected in real world prices
Of course, this was also reflected in the real-world prices of the latest generation iPhones in different 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 the time of launch. This reflects a price increase of 8.3 percent – which appears to offset higher overall manufacturing costs.
It is important to note that the cost of cellular components for the iPhone 14 Pro was 13 percent lower than that of the 13 Pro, and the total cost of other miscellaneous components was also lower. This was driven by a drop in pricing for 5G networking components, which became more mainstream due to assembly scale, and thus more affordable. Such margin changes are common each year, and are typically driven by market dynamics in the supply chain due to supply rates, 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 a summation of the overall pricing that each Cupertino company provides. For example, Samsung is Apple’s primary display supplier, while Sony supplies the main camera sensors. However, three companies – GSEO, Largan and Sunny Optical – are the suppliers of the main camera lens for the iPhone 14 Pro. For cellular components, Apple’s suppliers include Broadcom, Corvo, Qualcomm, and Skyworks. In the chips division, Kioxia and SanDisk supply NAND flash storage media, while Micron, Samsung and SK Hynix supply RAM modules.
