Analysis of iPhone 15 Pro Max Production Cost Reveals Increase

Analysis of iPhone 15 Pro Max Production Cost Reveals Increase

Analysis of iPhone 15 Pro Max Production Cost Reveals Increase

A recent bill of materials (BoM) analysis by Counterpoint Research provides insights into the production costs of Apple’s iPhone 15 Pro Max. Launched at the Far Out event in September, the iPhone 15 Pro Max boasts significant upgrades like the Bionic A17 processor, a titanium-based design, and an advanced telephoto camera. The analysis indicates that these enhancements have led to an increase in the total BoM cost compared to its predecessor, the iPhone 14 Pro Max.

Breakdown of Increased Costs

The BoM report reveals that the 8GB RAM + 256GB storage variant of the iPhone 15 Pro Max costs Apple $37.7 more to manufacture, an 8 percent increase over the iPhone 14 Pro Max’s 6GB RAM + 256GB variant. The primary factors contributing to this increase include:

• Processor Cost: The A17 Bionic chip, based on TSMC’s 3nm fabrication technology, is $30 more expensive than the A16 Bionic SoC used in the iPhone 14 Pro Max.
• Camera System: The new 5x Telephoto camera on the iPhone 15 Pro Max is 34 percent costlier than the camera system in the iPhone 14 Pro Max.
• Titanium Alloy Frame: The switch to a titanium alloy casing frame resulted in an 18 percent increase in costs compared to the previous model.

Cost Reduction in Certain Components

Despite these increases, Apple has benefitted from cost reductions in other areas:

• Memory Chips: Due to a downtrend in the global memory market, the cost of memory chips in the iPhone 15 Pro Max decreased by 34 percent compared to the iPhone 14 Pro Max.
• Display Costs: With LG Display joining Samsung Display as a supplier of iPhone LTPO displays, display costs for the iPhone 15 Pro Max have been reduced by 4 percent.

Apple’s Self-Designed Components

The report also notes that Apple’s self-designed components, such as the processor, the upgraded ultra-wideband (UWB), and power management integrated circuits (ICs), now constitute 25 percent of the total BoM cost for the iPhone 15 Pro Max. This percentage has risen from 22 percent in the iPhone 14 Pro Max.

Pricing Comparison

The iPhone 15 Pro Max starts at Rs. 1,59,900 in India and $1,199 in the US, compared to the iPhone 14 Pro Max, which debuted at Rs. 1,39,900 in India and $1,099 in the US. The report provides a nuanced view of how advanced features and market dynamics influence the cost of producing high-end smartphones like the iPhone 15 Pro Max.