Apple products are known to have a high gross margin, and it looks like the iPhone X (iPhone Ten) is no different. According to a Reuters report, Apple’s iPhone X has a slightly higher production cost than the iPhone 8, but the company’s gross margin on this is much higher. Another report also highlights that the despite the high price tag, iPhone X’s adoption is growing.
According to the Reuters report, which is based on TechInsights, the iPhone X costs only $357.50 to manufacture for the Cupertino giant. So if one considers the $999 starting price, Apple has a margin of 64 per cent on the device, points out the report. This is higher than the iPhone 8, which has a gross margin of 59 per cent and has a starting price of $699 in the US.
In India, Apple iPhone X is more expensive than $999 if one goes by conversion. Apple iPhone X starts at Rs 89,000, which is around $1372 if one goes by the current rates. The 256GB version with its price tag of Rs 1,02,000 has a $1572 price tag, thus increasing the overall margin for Apple where the India market is concerned.
The report also quotes Al Cowsky, the costing analyst for TechInsights as saying, “Apple is unique in the electronics industry for its ability to charge a premium price for its latest devices and for its ability to maintain that price even when selling devices through third parties like telecom carriers.”
It adds that new edge-to-edge display on iPhone X along with associated parts cost $65.50. This is nearly double compared to the $36 display pricing for iPhone 8, which has a smaller 4.7-inch LCD screen. Apple’s iPhone X is an OLED one while iPhone 8 series continues with the LCD panel.
Now while Apple iPhone X has a high price tag and clearly a very high gross margin compared to the iPhone 8 series, the adoption rate for the 10th anniversary iPhone is much higher. According to a study by Localytics, the iPhone X has managed to grab 0.93 per cent market share compared to the iPhone 8 after the first weekend of sales.
The study says Apple iPhone X managed to get a higher share than the iPhone 8, though lower than the iPhone 6, which had a 2.3 per cent market share after the first weekend sales. However, the report also notes while iPhone X’s adoption rate might seem lower compared to the other older models, it also needs to be remembered the market has a lot more iPhones in use compared to the situation in 2014.
Apple iPhone X is already sold out online in India on official retail partner websites like Flipkart, etc. We’ll have to wait and see when it comes back in stock.
With Reuters inputs