Everyone will have noticed: the iPhone 14 has become considerably more expensive. Inflation is one reason, but with the Pro models the price of the more expensive components also plays a role. The A16 Bionic chip costs around $110 to produce, says Nikkei Asia. That higher cost is probably related to TSMC's 4 nanometer process, which is a lot more advanced than previous methods. In addition, TSMC has an edge over other manufacturers, allowing them to charge relatively much.
The A15 Bionic was produced according to the 5 nanometer principle. The price could go up even further if TSMC manages to push the miniaturization process even further. The A17 chip for the iPhone 15 Pro is rumored to use the 3nm process, while the company aims to start 2nm production in 2025.
Incidentally, there is not much speed gain between the A15 and the A16. Geekbench results show that with multicore performance about 15% to 17% speed gain can be achieved. Nikkei Asia, in collaboration with Fomalhaut Techno Solutions, had a teardown performed to see which materials were used. Overall, manufacturing costs have increased by 20% when you look at all the parts of the iPhones. An iPhone 14 Pro Max would cost Apple about $501 to produce, which is $60 more than the iPhone 13 Pro Max. This is a relatively large increase. Since the 2018 iPhone XS Max, manufacturing costs have typically been between $400 and $450, Nikkei said. So now we also know what caused those higher production costs: the A16 chip. The new camera sensor from Sony also costs a lot more, namely 50%. But here the amounts are relatively low: the sensor now costs $15.
In the US, Apple does not calculate the increased production costs and proudly reports that prices have remained the same despite inflation and other uncertainties. Nikkei is warning investors that Apple's margin may have narrowed. But that might not be too bad, because prices have risen sharply in many other countries.
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