Apple’s making less money on iPhone 14 than ever, here’s why – Times of India

It has been a month since Apple unveiled new iPhones – the iPhone 14, iPhone 14 Plus, iPhone 14 Pro, and iPhone 14 Pro Max. The two Pro iPhone models bring some substantial changes compared to their predecessors, while the non-Pro models are incremental upgrades. The prices of the new models (except the iPhone 14 Plus) have remained the same as last year’s iPhone 13 models, and it may not prove to be a beneficial monetary move for Apple.
As per the latest report from Nikkei Asia, the cost of manufacturing iPhone 14 models has risen by 20 percent, an all-time high, notes the report. Since the prices have remained the same for the three models, the profit margins for the Cupertino giant have taken a toll due to raised manufacturing costs.

The report notes that the production of a ‘Pro Max’ model has cost Apple around $400 to $450 since 2018. However, an iPhone 14 Pro Max costs $501 (around Rs 41,361) to Apple, and the reason behind this hike in the cost is the higher price of the A16 Bionic chip, which alone costs $110 (around Rs 9,080).
The increased price of the new A16 Bionic chip could be why the two non-Pro iPhone 14 models come with last year’s A15 Bionic chip. For context, the A16 Bionic costs 2.4 times more than the A15 Bionic.
Moreover, the iPhone 14 Pro models come with new CMOS sensors from Sony, which are 30 percent larger but also come with a 50 percent increase in price. A single sensor costs Apple $15 (around Rs 1,238).

“Apple evidently has no other choice but resort to a strategy of mounting high-performance devices to differentiate itself as it cannot compete on new functions,” said Minatake Kashio, Fomalhaut Techno Solutions, a Tokyo-based research firm.
Since Apple began using in-house components, there has been a rise in the procurement of parts from the US, which is now a third of the total cost.

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