Apple earns 60% margin on the iPhone 16 Pro Max

Following the first iPhone 16 Pro Max teardown, now comes its first production cost estimate, or the so-called Bill of Materials (BOM). Apple’s manufacturing expenditure breakdown is, needless to say, not the complete picture, as there are many other hidden costs involved in concocting, crafting, and distributing an iPhone 16 Pro Max.

So much so, that Apple’s CEO Tim Cook even went on record once to say that these BOM cost estimates are nowhere near the truth and Apple’s expenditures are much higher than that. Of course, that’s what any CEO would say if someone claimed that they are selling their product for two or three times more than it costs to put together.

Still, the third-party Bill of Material analyses are useful in the sense that they compare two iPhone generations to gauge if it is the inevitable hardware upgrades that have forced Apple’s hand in raising the price or not.

iPhone 16 Pro Max BOM | Image credit – TD Cowen

In the case of the iPhone 16 Pro Max, the cost to manufacture it has been pegged at $485 by research firm TD Cowen, which isn’t much higher than the iPhone 15 Pro Max BOM of $453.

That is despite the larger display and bigger battery, or the new Camera Control button, not to mention the faster Apple A18 Pro processor that has been developed from the ground up with Apple Intelligence calculations in mind.

In fact, the most expensive components in the iPhone 16 Pro Max are the bigger 6.9-inch screen and the Tetraprism camera kit, both of which have notched a slight price increase compared to the iPhone 15 Pro Max. The new LPDDR5X memory technology is also more expensive than what’s in the 16 Pro Max predecessor, as are the storage memory and the chipset.

If you are wondering whether the new Camera Control pressure-sensitive key costs much extra, that’s been the least of Apple’s BOM worries, as the price of those buttons around the iPhone 16 Pro Max is a grand total of $19, bringing Apple’s gross margin on its 2024 flagship to the whopping 60% mark.

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Daniel, a devoted tech writer at PhoneArena since 2010, has been engrossed in mobile technology since the Windows Mobile era. His expertise spans mobile hardware, software, and carrier networks, and he’s keenly interested in the future of digital health, car connectivity, and 5G. Beyond his professional pursuits, Daniel finds balance in travel, reading, and exploring new tech innovations, while contemplating the ethical and privacy implications of our digital future.

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