iPhone 15 Pro Max’s BoM cost is 8% more than 14 Pro Max: Counterpoint

Counterpoint Research’s Teardown and BoM Analysis Service reveals that the total bill of materials (BoM) cost for producing an 8GB+256GB iPhone 15 Pro Max is $37.7. This marks an 8% increase compared to the 6GB+256GB iPhone 14 Pro Max launched last year.

Profitability Despite Higher Costs

Despite a $100 increase in the starting retail price, the iPhone 15 Pro Max is expected to yield higher profits due to its elevated gross margin. It holds the highest gross margin in the iPhone 15 family, even though it is the costliest model.

Cost Increase Factors

3nm Process-Powered Processor: The A17 Pro, Apple’s new-generation mobile platform, boasts TSMC’s advanced 3nm fabrication technology. With 19 billion transistors, 18% more than the A16 Bionic, it incurs an additional cost of around $30.

5x Telephoto Camera: The introduction of a 5x telephoto camera with a quadruple reflection prism and 3D sensor-shift OIS results in a 34% increase in the camera system cost compared to the iPhone 14 Pro Max.

Titanium Alloy Casing: The iPhone 15 Pro Max features a titanium alloy casing, reducing weight by around 20 g but increasing the cost by 18%.

Cost Reduction Factors

Memory: Despite upgrading to 8GB DRAM, a 2GB increase, the global downtrend in memory prices results in a 34% drop in contribution compared to the iPhone 14 Pro Max.

Display: With LG Display supplying LTPO displays in addition to Samsung Display, the display cost decreases by 4% compared to the iPhone 14 Pro Max.

Rising Share of Self-Designed Components

Apple’s self-designed components, including the processor, upgraded UWB, and power management ICs, constitute 25% of the total BoM cost for the iPhone 15 Pro Max, up from 22% in the iPhone 14 Pro Max.

Apple’s Vertical Integration

Counterpoint’s report underscores Apple’s growing control over design, innovation, scalability, costs, and profits in its product portfolio. This vertical integration provides differentiation, significant selling power, and buying power through expertise in design and component sourcing.

Having the most powerful smartphone SoC at the most advanced process node allows Apple to set higher standards for competition. The flagship iPhone 15 Pro Max is poised to be the most lucrative in terms of both top-line revenue and bottom-line profit.