Nikkei Asia reported that component prices for the newest iPhones had risen 20 percent to an all-time high. The production of the iPhone 14 Pro Max costs 514 euros, a huge increase compared to the iPhone 13, which cost 473 euros to produce, and the main reason is the A16 Bionic chip, which costs 112 euros.
Nikkei wrote that since the Pro Max model was first introduced in 2018, prices for these models have been between 410 euros and 462 euros. The news website made the logical assumption that if Apple is taking a hit on production costs without changing prices in the US, the company is likely to take a hit on profits.
The A16 Bionic chip costs 2.4 times more than the previous A15 chip, which is also available in the 2 basic models, iPhone 14 and iPhone 14 Plus.
Another reason is Sony’s new CMOS sensors, which are over 30 percent larger in size but also 50 percent more expensive, reaching a cost of 15.40 euros. Apple is getting its screens from Samsung Display, a deal that has been going on for several years.
Components for iPhone 14 devices from US-based companies account for almost a third of costs and cost over 10 percent more compared to 2021.
South Korea is the second largest supplier of components for phones, and the change has happened mainly because Apple is making their own products, such as the chipset.