The buzz surrounding Apple’s iPhone 16 series is palpable since its launch last month, with tech enthusiasts eagerly analyzing every feature and upgrade. A recent report has unveiled the manufacturing costs of the iPhone 16 Pro Max, revealing that the device costs $485 (around Rs 41,000) to produce. For context, the iPhone 16 Pro Max is priced at a staggering Rs 1,44,900 in India. This substantial gap between production cost and retail price highlights Apple’s impressive profit margins.
According to TD Cowen, an investment firm, the Bill of Materials (BOM) for the iPhone 16 Pro Max is $485. This figure is slightly higher than the $453 (about Rs 38,700) BOM for the iPhone 15 Pro Max. Despite the iPhone 16 Pro Max being priced significantly higher, the cost of materials used to manufacture it remains relatively low.
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It’s worth noting that the BOM only covers the raw materials and assembly costs. Factors like software development, marketing, and logistics also contribute to the final retail price.
The report highlights that the increase in BOM for the iPhone 16 Pro Max is primarily due to hardware enhancements. The display and rear camera system stand out as the most expensive components, each costing around Rs 6,700, compared to Rs 6,300 and Rs 5,900 for the iPhone 15 Pro Max. The introduction of new LPDDR5X RAM technology also adds to costs, priced at Rs 1,400, while the older LPDDR5 RAM in the iPhone 15 Pro Max was only Rs 1,000. Additionally, the A18 Pro chip and storage in the iPhone 16 Pro Max are priced at Rs 3,400 and Rs 1,900, respectively.
Despite these increases, Apple continues to enjoy a robust gross margin of around 70%, even after factoring in expenses like logistics and software development. Notably, the new Camera Control button adds a minimal cost of just Rs 1,600, only Rs 250 more than the Action Button on the previous model.