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The most expensive iPhone material cost exposure in history, this is the truth of Apple's huge profits?


This year, Apple sold a mobile phone to 13,000. "The most expensive iPhone in history" is probably the most impressive impression of many people on this year's new iPhone.

So where is the most expensive iPhone in history? Recently, TechInsights disassembled and analyzed the iPhone XS Max (256GB) . The report shows that the component cost of this model is about 443 US dollars (about 3044 RMB), than the 64 GB iPhone X. It is nearly $50 higher.

However, compared to the iPhone XS Max (256GB) price of 1299 US dollars, component costs only accounted for 34%, gross margin may be higher than the iPhone X, is this the secret that Apple once occupied the profit of the smartphone market?

The most expensive iPhone in history, it is also the most expensive iPhone

According to TechInsights' disassembly report , the most expensive of the iPhone XS Max components is still the screen, costing $80.5. The A12 biochip and baseband chips took second place, at $72. The flash chip that follows is $64.

In addition to the higher cost, there is a $44 camera and a $58 mechanical component. Basically, the cost of all components of the iPhone XS Max has risen to varying degrees compared to last year's iPhone X.

However, after all, the screen has increased from 5.8 inches to 6.5 inches, and the battery capacity has also increased. Some component cost increases are inevitable. In addition, since the supply of OLED screens is almost monopolized by Samsung, Apple's bargaining space on screen components is relatively small. And the screen is also the most expensive component of the iPhone.

The report said that in order to control costs, Apple has offset the screen cost by removing some of the iPhone XS Max's 3D Touch components without affecting the use. It is reported that the cost of the cut components is $10, which maintains the screen cost to 80. Dollar.

The component cost of the iPhone XS Max $443 has once again refreshed the iPhone's component cost record, which is nearly $50 higher than the iPhone X's component cost ($395.44), which is comparable to the original iPhone's price ($499).

It's worth noting that in the past 11 years, the proportion of iPhone hardware costs in the price has been reduced from 46% in the original iPhone to 34% today, while the average selling price (ASP) of the iPhone is also from $549. It has risen to $724 today and has risen by 35%.

On the one hand, the cost of compression, on the one hand, to increase the price, which to some extent reflects the origin of the iPhone's high profits. Specifically, the price of the iPhone has experienced several obvious price increases, namely 2008, 2011, and 2017. The representative models are iPhone 3G, iPhone 4s, and iPhone 8.

These models have made the iPhone's starting price move to the $599, $649, and $699 mark, while last year's iPhone X raised the threshold directly to $999. Coincidentally, the hardware cost of these models can be reduced compared to the previous generation, keeping at around 30% of the price.

An article from Bloomberg two days ago pointed out that the memory space is actually the most profitable part of the iPhone. Apple uses more price increases than flash memory to get more profit. This view seems to be true for the entire component cost.

But if you say that Apple can get more than 60% of the gross profit on the iPhone, it is too ideal. After all, in addition to component costs, there are a series of costs such as assembly, R&D, software, advertising and distribution.

As for how to look at the relationship between iPhone cost and profit, we will elaborate on it later.

What is the cost and profit of the iPhone in the smartphone market?

Since you want to say that the iPhone is profiteering, let's take a look at the proportion of the component cost of other smartphones in the market.

March this year had TechInsights Samsung Galaxy S9 +, the component costs Samsung Galaxy Note8, Huawei Mate10 with iPhone 8 / iPhone X are comparative .

According to TechInsights, the Galaxy S9+ has a component cost of $379, which is close to the iPhone X ($395.44). The camera cost is $48, which is higher than the iPhone XS Max.

However, the cost of the S9+ screen is lower than Note 8 and S8 +, which is about $72.5. It's also a 6.5-inch OLED display, but at a lower cost than the iPhone XS MAX, which is clearly due to its own display supply chain advantage.

The S9 + is priced at $840 and the component cost is 45%. Compared to the iPhone X and iPhone 8, the profit margin of S9 + is obviously much lower, probably only equivalent to the level of the original iPhone.

As for the Huawei Mate10 component cost is 290 US dollars, slightly higher than the iPhone 8 (285 US dollars), the price is similar to the iPhone 8, so the proportion of the price is 40.8% as the iPhone 8.

Compared with the iPhone's flagship component cost, Mate10 and S9+ have one thing in common, that is, the screen cost is lower than the iPhone, and the camera is higher than the iPhone. Other components include the cost of memory, storage, RF transceiver, battery and other components. The difference is not big.

In this case, although the hardware cost ratio of the iPhone is relatively low in the industry, it does not have a big gap with the mainstream flagship of Samsung Huawei and other manufacturers, but the profit of the entire smartphone market is not like the data. It seems that you can go to 40%.

According to a report by research firm CounterPoint , the total profit of global smartphones in the second quarter of 2018 was US$11.4 billion (about 78.4 billion RMB), of which Apple ate 62%, but this is already the fourth quarter of last year. 86% lost a lot, which means that domestic mobile phones have more profit in the smartphone market.

Despite this, the profit margins of various mobile phone manufacturers except Apple are still not high. According to IDC 's 2018 Q2 major mobile phone manufacturers' shipments, Apple can get a profit of 1171 yuan for every mobile phone sold, while Huawei has only 115 yuan profit, OPPO and vivo are 133 yuan and 134 yuan respectively, the worst is Xiaomi, only 73 yuan.

Therefore, Lei Jun promised that Xiaomi’s hardware comprehensive net profit margin will never exceed 5%. It is not so much a conscience performance. It is better that the profits of the entire smart phone market are generally not high. Huawei’s glory president Zhao Ming once said that the profit rate can reach 5%. The level of mobile phone manufacturers is "rare."

Among the top five mobile phone manufacturers with global market share, only Apple and Samsung can achieve a profit margin of more than 5%. However, even if Apple's profit per mobile phone is 1,171 yuan, it only accounts for 23.5% of the average iPhone price of 724 US dollars (about 4978 RMB).

If the hardware cost really only accounts for more than 30% of the price, and then deduct 23.5% of the profit, where is the remaining 50%?

Ten thousand yuan iPhone costs 3000, this is the truth of Apple's huge profits?

As mentioned above, the cost of looking at the iPhone cannot be limited to hardware costs, but it is very easy for consumers to misunderstand.

For example, Lei Jun said that "the comprehensive net profit margin of hardware does not exceed 5%" is not the same as multiplying the price of Xiaomi mobile phone by 5%. It is the money earned by each mobile phone, not that 95% of the price is Hardware cost

▲ Xiaomi 8 transparent exploration version

Profit is indeed equal to income minus cost, but the net profit mentioned here, in addition to hardware materials and production costs, there are a series of costs such as research and development, marketing, taxes, patent fees and channel sharing. The situation of each manufacturer may be different, and the specific proportion of manufacturers will rarely be disclosed.

The data of third-party organizations does have certain reference value, but the component cost is difficult to accurately reflect the profit structure of the manufacturer. Apple CEO Cook said in 2015 that such cost analysis does not reflect actual costs:

I have never seen a report that is close to being accurate.

Therefore, it is not easy to accurately estimate the cost structure of the iPhone. For example, the R&D optimization cost of iOS 12 is not in the component cost of 443 USD. Apple’s second-quarter earnings report revealed that the R&D cost has already invested 3.2 billion U.S. dollars. More than $10 billion.

▲ Apple CEO Tim Cook

However, it is difficult to clarify the proportion of these R&D expenses on different product lines, and some of the R&D expenses are Non-recurring engineering, that is, after a certain technology is developed, it can be used in subsequent products. Reuse, which is also very common in the iPhone, how to calculate this part of the cost is also very complicated.

Of course, you can also look at the operating profit margin, which is the ratio of the operating profit of the company to the operating income. If you use this indicator, Apple's operating profit margin in the previous fiscal quarter was 21.6% , which means that Apple can earn 2 cents per 1 yuan of income. The profit is already very impressive, but this is Apple's overall profit margin. Not enough to explain the iPhone.

▲Image from: CNBC

However, the iPhone does earn most of the profits in the smartphone market. There is a certain brand premium and a certain relationship with cost control. Compared with the large-scale investment in online channels of domestic mobile phone manufacturers such as Huawei OV, Apple's direct sales store has always been the highest-efficiency retail store, while Ren Zhengfei complains that although the mobile phone sells more, the money is earned by the channel.

▲ Image from: CNET

As for the iPhone, this kind of profit is not a huge profit. It seems that the public has different definitions of profiteering. Some people say that 5% is already profiteering.

As for this year's new iPhone, I don't want to buy this question. The annual answers are similar. I have to look at my own budget and needs. The buyer will still buy it. It will not be too cold for the iPhone.

If you don't buy it, you can look at my colleagues and hold the iPhone XS to search for network signals.

The map from: cnet