Despite costing Apple 25 percent more than iPhone 8, Apple’s new flagship series is being retailed 43 percent higher than the iPhone 8 according to a recent report.
The new smartphone takes a manufacturing cost of $357.50 and has a selling price of $999 and hence, gets a gross margin of 64 percent, comparing to the iPhone 8 which has a gross margin of 59 percent.
This strikes as a surprise as iPhone X is the latest design of the company that has taken the retail markets by a storm. Ideally, the margins should be more than the iPhone 8 since tech-products become more profitable after the design matures and the cost of parts drop down.
Several factors have played a role in pushing up the price of iPhone X, including its edge-to-edge display of 5.8-inch (14.8 cm) and other associated parts costing $65.50, as compared to $36 for the 4.7-inch display of iPhone 8.
Another factor that played a role in raising the price of iPhone X might be its “Super AMOLED” technology compared to older LCD technology used in iPhone 8.
$36 stainless steel chassis of the iPhone X versus $21.50 aluminum jacket of iPhone 8 is another pricey choice of Apple for the iPhone X. This is because steel is less likely to bend when flexed as compared to aluminum.
While Apple has declined to make any comments on the analysis, these pricey choices might be a result of their lessons learned from the past.