A recent analysis from TD Cowen, shared by Apple Insider, reveals that Apple’s latest iPhone models are costing more to manufacture — even though the retail prices remain stable.
Component Price Drive Up Costs
The report points to a particularly sharp rise in the production costs of the iPhone 16 Pro Max, Apple’s premium model.
The production cost for a standard iPhone 16 has risen from $395 to $416, marking a 5% increase. Yet, despite this bump in production expenses, Apple’s official retail price for the model still starts at around $799, according to Trend.
One of the largest expenses is the display, which now costs $65 per unit, while an upgrade in RAM — from 6 GB to 8 GB—has seen an 89% cost increase, going from $9 to $17.
Pro Max Costs Spike
For the high-end iPhone 16 Pro Max, production costs have surged by $32, bringing the total cost per unit to $485. The priciest components here are the display and rear camera, each costing $80.
According to the report, 40% of the Pro Max cost increase is attributed to inflation, while the remaining 60% is due to upgraded components.
Apple has managed to offset some of these rising costs by reducing expenses in other areas. For instance, some screen components are now more affordable compared to the iPhone 15.
This cost-balancing strategy allows Apple to keep its retail prices stable, preserving its competitive edge without sacrificing annual upgrades.
