Its been more than a month since Apple unveiled the iPhone 12 series. A new teardown by Experts from Fomalhaut Techno Solutions reveals how much it costs Apple to manufacture iPhone 12 Pro. According to the report, the iPhone 12 Pro components cost 27 percent of the phone value. It is a steep increase from last year’s 9.1 percent.

The increase in component price is most likely due to the addition of 5G. According to the report, the iPhone 12 Pro components cost $406. Furthermore, iPhone 12 Pro has more components from South Korea as opposed to the United States. This is due to the fact that the iPhone 12 uses OLED displays procured from LG and Samsung, both of which are from South Korea.

According to the report, the OLED displays are the most expensive components and cost $70 per unit. Additionally, the Qualcomm X55 5G modem accounts for another $90. Meanwhile, other major components like the A14 Bionic chip costs $40; RAM cost comes to $12.80/unit, and storage cost adds up another $19.20. Interestingly, the Sony camera sensor is relatively inexpensive at $7.4 and $7.9.

There is a good chance Apple is paying less for the components owing to the large volume of orders. It is worth noting that teardown only lists the cost of all iPhone 12 Pro components. It doesn’t account for other expenditures like R&D, operations, marketing, and supply chain investments. The company also has to spend money on warranty repairs, and this is not included in $406.

Our Take

One thing is certain, Apple’s profit margin on iPhone 12 Pro is much less than last year. Perhaps this is one of the reasons why they ditched EarPods and charger. Typically, when the price of components increases, Apple tries to cut costs by curbing other expenses. That said, the economy of scale tilts in Apple’s favor, and they do have an edge here as compared to smaller companies.