TD Cowen analysts tried to preliminarily determine Apple’s costs for the production of the older model of the latest generation smartphone by breaking down the cost of the iPhone 16 Pro Max with 256 GB of memory into components and comparing it with its predecessor. Costs for components and materials increased from $453 to $485.
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Taking into account the absence of serious differences in characteristics, a difference of 7% is quite predictable, and for some components it has simply increased due to current market conditions. In particular, the 8 GB LPDDR5/LPDDR5X RAM chip increased in price from $12 to $17, and the 256 GB solid-state drive increased in price over the year from $17 to $22. One way or another, both components in the total cost of the iPhone still occupy no more than 3 and 4%, respectively.
The display, which grew slightly in size, increased the company’s costs from $75 to $80. The A18 Pro central processor is expected to have increased from $40 to $45 compared to its predecessor, but its share in the cost of the smartphone still did not exceed 9%. In fact, the most expensive components of the iPhone 16 Pro Max in specific terms remain the display for $80 and the camera module located on the back of the case, which costs the same $80 and forms 16% of the cost of the device. Last year, camera modules (excluding the front one) cost no more than $70 as part of the iPhone 15 Pro Max.
The price of a set of sensors increased from $16 to $19, the case frame increased in price from $18 to $19, and analysts even more expensively estimated the manufacturer’s costs for assembling the iPhone 16 Pro Max and other configuration nuances – they increased from $55 to $57. The power electronics included in a smartphone even dropped in price from $20 to $17, as did radio frequency components (from $30 to $29).
TD Cowen experts expect that by the end of the third quarter, Apple’s partners have released about 45 million iPhones of various models, and in the fourth quarter they will release about 80 million units. Of these, the iPhone 16 line will account for approximately 65 million units. In the second half of the year, the older Pro and Pro Max models will sell better in specific terms than their predecessors a year ago, their share will increase from 58 to 66% compared to the older smartphones of the iPhone 15 family. Delay in the distribution of Apple Intelligence functions outside of English-speaking markets and The USA in particular will have a negative impact on the dynamics of demand for the new generation of iPhone, as many analysts are convinced.