The cameras inside the iPhone Xs and Xs Max are estimated to cost $51.10

Huh people were telling me that small sensors and lenses are uber cheap.
Per unit of area, this costs much more than Sony A9 (which is the only FF stacked BSI sensor, for now).

Oct 6, 2018permalink

Gorpalm

These costings are fascinating - Mainly because I think they use the same gross/net cost calculations that they use in the film industry (hence why actors always negotiate a percentage of the gross - Because net the film Always loses money lol). That $390 BOM, yeah wouldn't surprise me if the cost of R&D, cost of shipping, cost of marketing, value of stock space, value of retail space, cost of sales staff, cost of support, cost of cost of cost of etc etc and etc was all factored in to the per unit cost. Their screens (big cost) are bought in, but their chip (another big cost) is home-grown. The most premium of mobile brands doesn't also become the firm sitting on that Huge cash reserve by marking up a lowly 300% from factory to retail. Considering in the luxury trade, mark-ups can run into the four figures based on the strength of the brand is a clue. And for everybody who's asked "How do they do that??" when handling a flagship that Retails at $400-500, now you know.

Oct 4, 2018permalink

An interesting point here is that the camera makes up 13% of Apple's fixed hardware costs when manufacturing a phone noted for it's photographic prowess.

Given that a $20 increase in hardware costs = $100 at retail (once additional costs have impacted), and the fact that Apple could conceivably have got away with a $30 camera unit (I'm just imagining here), it shows:

a) Apple's prioritisation of photography as a part of the package relative to other hardware costs
b) How much Apple think consumers will prioritise photography as a part of the package, relative to cost increases incurred by that focus.

Guys, that's the story. Stop grousing that there wasn't an essay about all the other costs that go into making a phone. If you want that info, you can find it elsewhere.

Not click-bait. You guys can be so grumpy.

Oct 3, 2018*permalink

A post in DPReview's defence:

1. I found the article and data point interesting. In 2018 a device noted for it's photographic prowess contains a camera with a fixed hardware cost of $51.10. What a world we live in.
2. The article never claims that fixed hardware costs are the entire story behind product pricing and markup. It was not a call to arms to protest the retail-end expense of phones. I don't know where some of you got that idea.
3. We are all smart enough to realise that hardware costs are but one part of a product's pricing, especially for a company like Apple who develop software in-house.
4. They even note that retail price increases scale disproportionately to hardware costs - clearly implying that there is more to the story, not covered by the narrow stated focus of this article.
5. If you're smart enough to know all the information an article should have included, stop moaning that the article didn't include that information (this applies to so many DPReview comments.)

Oct 3, 2018permalink

falconeyes

I don't get all the comments here ...
The article is about the BOM (bill of materials). No more, no less. Nobody ever claimed that this is related to the sales price; except of course it can't be lower than the BOM.

Oct 3, 2018*permalink

Thank heavens someone here got it.

Such an angry community.

Oct 3, 2018permalink

falconeyes

Note: in the IHS report, the 64GB memory is listed with $40.75 BOM.
However, this includes RAM, controller etc. The TLC-NAND only prices are:
64GB: $16.80
256GB: $33.60
512GB: $62.80
based on 8 NAND chips at daily spot price (high) as of today. Contract prices could be slightly higher. But don't think the 512GB option would use 8x$40 or $320 worth of memory...

Oct 3, 2018permalink

anyway

Why stop there, go further – the iPhone Xs consists of a few ounces of silicon, oxygen, carbon, aluminum and lithium – which cost $5 max! (Some assembly required.)

Oct 2, 2018permalink

badi

true that, very true ...

but actually this shows that apple is not that overpriced compared to say, Samsung, as people make it sound :)
390 -> 1099 (280% for apple)
375 -> 840 (225% for samsung)
If we consider that samsung just tweaks a bit google's android, while Apple develops their OS internally...

Oct 3, 2018permalink

falconeyes

Apple never was overpriced. Considering their base models at release date. Whenever you took the BOM and compared it with Dell, HP, Samsung, whoever, Apple was no more than 10% more expensive, and actually cheaper in some instances.

Where Apple is expensive is:
- overpriced options (not user-upgradable, like memory, disk etc.)
- no price degradation over time (although this cancels out if you sell used).

Oct 3, 2018permalink

Kipplemaster

This is like valuing a book based on the cost of paper and ink. This approach would be valid if looking at blocks of gold but for anything manufactured it is wholly misleading. When music was on physical CDs people used to quote similar utterly spurious information about the cost of the materials.

Oct 2, 2018permalink

The Silver Nemesis

That much?

Oct 2, 2018permalink

S Yu

Regardless of the hardware, its combination with the Smart HDR is really quite impressive, GSMArena already has a few sets of comparable samples between the IPXS, GSN9, P20P and IP8. Go check it out, especially pay attention to the night shots.

Oct 2, 2018permalink

BBnose

Just bought the Xs Max. This is my first iPhone

Oct 2, 2018permalink

princecody

Does Apple create or outsource their camera tech?

Oct 2, 2018permalink

akcrain

Last I heard, their camera sensors were made by Sony, and I don't remember hearing any big exciting announcements that they were taking over making their own camera sensors (which they probably would've trumpeted loudly if true).

So, almost certainly outsourced. Although the software driving it is in-house.

Oct 2, 2018permalink

Debankur Mukherjee

Apple is the first $1 trillion company in history. ............the secret is out............

Oct 2, 2018permalink

capeminiol

I would say thanks to their products, marketing, buyers, and tax evasion.

Oct 2, 2018permalink

And yet, despite the preposterous profit built into every phone, the people who work at the Apple stores will still make starvation wages. Apple used to be the coolest company on the planet, now it's the worst.

Oct 2, 2018permalink

IR1234

Give it up. Sales staff are $9-15ph, and I doubt there are many $9 people as you’d never fill the position for that little, Genius Bar staff are up around $30.

Oct 2, 2018permalink

Oh, the first world citizens being unable to buy an extra car and yoga classes are 'starving' now.

Oct 6, 2018permalink

Where I live in the United States grownups with full time day jobs still have to work a second job to afford heating oil for the winter, tires on their cars, and god forbid someone in the family gets sick.
America is increasingly a land of haves and have nots. Get out of the NY/LA bubble and you’ll find lots of people working three or four jobs none of them with any kind of benefits or opportunity for advancement.
Or just ask that housekeeper you always complain about because you think paying her $12 an hour is a rip-off even though you dodge paying her social security and Medicare taxes and don’t carry workers comp.

Oct 6, 2018permalink

@SmilerGrogan
Why Apple stores workers are entitled to having higher living standards than SE Asian workers actually assembling Apple products? Why are they entitled to a car? And not residents of areas where Apple contractors dump toxic waste?

In case you missed, I don't live in USA at all.

Oct 9, 2018permalink

Indeed not. But nothing will get better until we agree that the situation is due to the ever-increasing greed of the executives and stockholders of Apple and companies like it.
The reason that Apple is sitting on more than $200 billion in cash reserves is not because Apple makes better products at better prices, it's because Cook and company have made an art out of grinding down suppliers and low-level workers alike into accepting much less than they deserve, and convincing customers into paying more than they should.
Woz and some of the early Apple engineers earned the right to be zillionaires, but the rest of them, from Tim Cook on down are faking it.
Apple's iPhone software continues to be mediocre. They lie about throttling last phones (and based on personal experience, the throttling started long before they were caught at it) and their lightning cables and earbuds start to self-destruct as they're taken from their packages.
It's sad.

Oct 9, 2018permalink

I do not think that Apple grinds low level workers more than everyone else. Probably they have discounts from the suppliers because they buy in large volumes.
I think solution would be to give money to those who contribute to open software and hardware and those who legally protect open source (not those who teach about Gender Studies in Open Software) rather than pressuring Apple to share its profits.

Oct 9, 2018permalink

KAllen

Break down anything to component form and it's cheap, would you have the knowledge toput it all together, that's what you pay for. How much does each part of Photoshop cost to put together,i'd guess at 0.

Oct 2, 2018permalink

In some cameras large sensor itself accounts for half the cost.
Lithium is expensive. Gold or some other metals are too, etc. etc.
These components are increasingly complex systems themselves;

Oct 10, 2018permalink

Dave Andrade

It's hard to put this into perspective. Let me explain.

It could be "only" $51 because they produce so many of them that regardless of their quality they are cheap, based on bulk. Or....they are just cheap.

Also what is the price of other cameras in other phones? Are those $20? If so, this would make this one, in theory, better. Only in theory though :)

But yes, it does put everything in perspective.

Oct 2, 2018permalink

akcrain

Yeah, I was really confused coming into these comments seeing all of these people implying $51 is cheap for a camera phone module.

For perspective, the RETAIL, non-bulk price of a replacement for the iPhone 8 camera module is about $38. Apple's paying wholesale with an insane bulk discount and it's still estimated at $51? That's insanely expensive.

Oct 2, 2018permalink

Bobthearch

It's actually a big jump from previous iPhone versions. But the jump doesn't mean they are using more expensive cameras, it's simply a result of the fact that this phone has three cameras.

Oct 2, 2018permalink

samualson

I have a smartphone but never use it , if my phone rings i know for a fact it's the wrong number.

It's for emergency use only , no emergencies so far so not getting my $ worth .

Yes i know i'm an odd one , most are the opposite of me and love their phones to death .

People love phones and gaming , i gamed once as a kid then moved on.

Have a good day everybody

Oct 2, 2018permalink

You are not alone... ;-)
I use a $20 cellphone with a 2-week battery life for emergency calls when I am outdoor...

Oct 2, 2018permalink

You are not alone. My smartphone just sits there never ringing, like it's constantly telling me me "your friends have all forgotten about you, not even your mom remembers your number."
Their one saving grace, I think, is that they take very decent extreme closeups in good light. Few cameras allow you to shoot just a couple of inches from your subject. But you definitely need to put a silk between the subject and the light.

Oct 2, 2018permalink

sh10453

You are not alone. My Huawie Honor 8 is very quiet. It rarely, if ever, rings.
It refreshes my memory when it rings because sometime I forget how it sounds until I receive a call. Most of my calls are on the wired land-line.
In no way I'd ever hand Apply $1,000 for a phone.

Oct 2, 2018permalink

SmilerGrogan,
I do not understand why people focus on the (short) distance to take close-ups. This is the magnification ratio that matters. The advantage of a good macro lens, on a "real" camera, is that it allows to achieve the same, or greater, magnification ratio than your smartphone, but at a longer distance, which has many advantages.
Also, the wide angle of the smartphone lens distorts the perspective at short distance (portrait, close-up).
Now, for sure, it is better than nothing...

Oct 2, 2018*permalink

Naveed Akhtar

These expensive smartphones are a symbol of status, they have to be expensive.
Also, they are always short of supply most of the time and high in demand. So I won't blame these corporations, but ourselves (consumers).

If its in my powers, I would also put at-least 100% tax on these gadgets, considering how much earthly resources (specially the rare Earths metals) they consume and how many we are buying without a real need and realisation of the damage we are doing to the planet and the real need that might emerge in future for us or our future generation.

Some of these expensive metals are: copper, nickel, silver, gold, platinum group metals, cobalt, lithium, lead, tin, zinc, rare earth metals, gallium, indium, iron, chromium, niobium, tantalum, titanium.

Oct 2, 2018*permalink

Martin.au

Good thing you have divested yourself from hobbies with expensive electronics then. Oh, wait...... https://www.dpreview.com/members/9668300671/gearlist

Oct 2, 2018*permalink

Rolleix

I have the iPhone 6plus, looking to upgrade to the XS Max and I drive a 2005 Ford Excursion V10. I also happen to love My Planet Earh. :)

Oct 2, 2018permalink

Naveed Akhtar

Martin.au you completely missed the point. If you need for a project or work then its fine, but if you buying them for fun or as a fashion item, then you better hold your GAS.
Also lower down the damage by reselling your items and buying used ones.

And the main point which, obviously you completely missed or ignored is about price and tax. A special tax on this for amount atleast equals to the amount it needs for Governments to recycle your electronics.

At the moment less than 1% of your mobile phones get recycled. As an example, I upgraded my phone to LG G7 bec I need that ultra wide lens on it in my pocket. My previous phone Samsung S7 was as good otherwise. So I reconditioned it (added new battery) and then give it to charity; kind of taxed myself.

P.S I have no intention to judge you gentlemen; you may all very well, love mother Earth and still have your weaknesses / addictions.
I hope I cleared my point this time!
Peace!

Oct 2, 2018permalink

Michael1000

Governments don't recycle electronics. Recycling companies do, and they make money doing it.

Oct 2, 2018permalink

Arastoo Vaziri

Sad but true: plastic lenses and tiny sensors which obvious flaws are compensated by software. That's "computational photography" for you.

Oct 2, 2018permalink

photogeek

$51 for the camera module and $1B for the chip and software that actually make it deliver the results that it does. I'm actually surprised it's even $51.

Oct 2, 2018permalink

keeponkeepingon

>The total cost of camera components

This is a bit misleading as i'd consider the screen a "camera component" along with the cpu needed to process the image, flash, internal storage and anything needed to get the image off the phone (lightning connector/hardware or wi-fi).

What you are really saying is the total cost of the camera module and sensors. Has dpreview ever provided that information for any other camera? At this point given they are on the 100th regurgitation I imagine it costs canon abut $1 to make their well loved 18mp sensor...... It would be a bit interesting to see sensor cost versus camera cost for all of the major players. Sure figuring that out may be hard but isn't that what tech journalists are for?

Oct 2, 2018*permalink

It is not totally misleading as all the components you mention are already there for other purposes. If you remove the camera module, you cannot get rid of the screen, internal storage, etc... Even the LED flash that is used as a torch.

Oct 2, 2018*permalink

$1000 for a phone, fools are easilly parted with their money

Oct 2, 2018permalink

keeponkeepingon

That's a bargain!

"On September 21, 1983, Motorola made history when the FCC approved the 8000X, the world's first commercial portable cell phone. It cost consumers a whopping $3,995 at the time."

In 2018 $$ that would be like $10 grand.....

Oct 2, 2018permalink

That depend on what do you with that phone and how often you use it. A business man always on the run conduct his business though mobile device would find this tiny $1000 computer that do it all, from making sales, data analysis, calendar, bill payment, phone call to keeping family in check, rather affordable and reasonable.

Oct 2, 2018permalink

As a business man myself I do all that on my £120 Huawei oh and the battery charges properly 😂

Oct 2, 2018permalink

But $1000 for a phone you can't charge properly.... Did you see that news story 🤔

Oct 2, 2018permalink

That's more power to you, Barry. I don't see any reasons any successful man would knock off a $1000 device that make them millions. Unless you are just a sad cheap lad, or you don't make enough to cover your device.

Oct 3, 2018permalink

badi

@Daniel... but you just point out that you want the device for the "status", not for what it offers.

A business man will actually want a reliable device. That doesn't exclude Apple, of course, by the contrary they proven to be quite reliable. It's just that he will never go for a new release, which are almost always prone to bugs - battery charging, batteries exploding, poor signal in certain situations, etc, etc.

Oct 3, 2018permalink

@badi I'm not sure how you draw that conclusion. Unfortunately I have to use both for app development. No choices, It's part of the job, not for status. Just FYI, try ask any apps developer which platform is more reliable, may be you learn a thing or two about real world practice than fanboyism.

Oct 3, 2018permalink

Daniel did you miss the massive charging issues the new XS has? Have a Google phones aren't much use when the battery runs out!

Oct 3, 2018permalink

badi

@Daniel, maybe i misinterpreted what you said, or meant to say... but your words exactly:
"I don't see any reasons any successful man would knock off a $1000 device that make them millions. Unless you are just a sad cheap lad"
which implies, that if you don't want to show that you are a "cheap lad businessman" you have to have a $1000 phone.

My point being that a device that is proven and cleared for bugs at least half a year is almost always a better idea for business, and of course that if you don't need face recognition or blue-tooth 6.0 or something, a 1-2 year old model will do all the same work.

Again, maybe my understanding was wrong ... sorry for that, but partly your phrasing wasn't the best either :)

Oct 3, 2018permalink

Why Toi

Now, try and take a photo or video without the software... Whilst the camera HW may be around $50, the actual cost will be far more. Good for sensationalistic headlines though.

Oct 2, 2018*permalink

keeponkeepingon

Or the screen, or any storage, or a CPU to processes the sensor data or any means to get the image off the phone.

I'd wager like 90% of that phone is involved in making a photo/video so yeah it's totally BS and shame on dpreview for not calling it out......

Oct 2, 2018permalink

Death89

Yep. Too right. The camera is more than just the lens and sensor assemblies.

Oct 2, 2018permalink

The only material cost of software is the ROM which hosts it... And the screen, CPU, storage are already there as the components of a "pocket" computer. You do not add them to a smartphone when you add a camera module...

Oct 2, 2018permalink

msheikh921

Am kinda surprised that a lot of the commenters are surprised (heck some are defensive) with that price!

Its quite normal for the camera assemblies in smartphones to top out near $40. (Not counting the front elements though)
But that doesn't make it a "$40 camera"; camera assemblies (lens, sensor and connector) doesnt function on its own.
There is a ~$70-80 Display, ~$50-70 processor and another ~ $50 for the memory and bit less than that for the battery and body and etc. So to be able to take a shot (not counting the "phone" wireless communications parts, speakers ...etc) ; in other words to run the camera part in such phones, it's like a $250+ in parts only.

Now add a bit more for the modems, -hand detecting- antennas and SW, cost of R&D, logistics, and $250 for the apple logo and $500 to pay for the brainwashing marketers wrangling all those iSheeps and voila! $1000 ....:p

Oct 2, 2018permalink

And TechInsights estimated the cost at $443.00: https://www.gsmarena.com/apple_iphone_xs_max_components_value-news-33454.php

Just shows you how wrong most of these analysis are

Oct 2, 2018permalink

MichelBB

It is close to 390$ mentioned in this article

Oct 2, 2018permalink

kobakokh

BOM... Now think - that BOM is also under 300% of profit, its mean a real price of BOM is about 120 USD... and this is a true price of iPhone BOM... You must calculate a profit not just iPhone but also the profit of all of that BOM manufacturers and you will see the capitalism real face, how some people (216 millions, who bought, for example, iPhone in some year - its a 2.8% of world population, not very big number in fact!) pay 10 times more then real BOM cost? Development of next phones cost less then 5% of retail cost of Phones, and as you can see, not Apple developing own phone,s but other manufacturers developing camera, memory, screens, etc, Apple is just assembling them as iPhone will add of software iOS. Other manufacturers doing same job, in fact. Success of apple based on strong mind sleeping of that 3% of world population, as we can calculate...

Oct 2, 2018permalink

tangbunna

no.. they did not dream last night of how to assemble those part. they worked from day one to more than a decade to make the last iphone.
they set the profit margin correctly to cover all their sweats and time and after sale services. but the problem are "buyers" who buy too many more than their bank can hold.

Oct 2, 2018*permalink

kobakokh

ok, i see... Its mean until capitalism will exist, prices will rise up and rise up... sad...

Oct 2, 2018permalink

Jon555

In low-medium volume manufacturing where you make something yourself you'd like the BOM to be about 40% of the price you sell it for (35% is better). Then when you factor in all the development costs, staff costs, costs of running the company (buildings, etc.) you should be making a reasonable profit. If someone else makes it then the margin can come down so the BOM + assembly costs is about 65% of the price you sell it for, Plus the assembler will charge a much more modest margin. For very high volumes you might go to lower margins, but you still have to pay all the staff all the time...

Oct 2, 2018permalink

kobakokh

not right, that BOM also include parts from another BOM, sometimes there is at least 56 deep steps. And all of them getting not 40% but 25%, but 3-4 steps and you will get 100% for final BOM for Apple... Mobile phone must cost today not more then 25-50 USD if there will be dragon profits, then there is a like real war between manufacturers...

Oct 2, 2018permalink

tangbunna

Xiaomi CEO said they only get 5% profit from their products. still i do not think it is 5% may be 20% at least. but it is enough to prove that xiaomi plays low balls whereas all other conpanies are trying to add 100% to 200% of the BOM. and only Apple and Samsung success with this huge profit.

Oct 2, 2018permalink

Jon555

There's a difference between the cost of the bits and how much money you make on selling the product, which includes many other costs. Also in high volume businesses making low margins can be okay if you make it a lot of times each day. If you sell high end watches and sell one 50k watch every other day then a 50% gross margin means you are doing okay (that's 25k profit). If you're a supermarket making 5% on something costing 10 that's okay too if you sell one every 2 minutes, as that shelf location is making 5% 400x a day (depending on opening hours).
When I started designing x86 processor cards the aim was 65% gross margin (so 65% of the selling cost was profit over BOM cost) as that covered all our costs (we built everything ourselves except the PCBs) and left a reasonable margin. Over time and competition that came down a bit, getting stuff made externally reduced it more.

Oct 2, 2018permalink

Aroart

216 million I phones were sold in the 2017 fiscal year... I still have the 6+ and running strong.. There worth every penny.. Most of my friends Android devices barely survive 3 years..

Oct 2, 2018permalink

SMCTakumar

Not sure about that. A lot of people I encountered with iphones, they complain and had their batteries replaced all the time, sometimes once a year. My Moto Z play (early 2016 device), is like new and has the latest Android P, battery life is still crazy good, two to three days light use no problem.

Oct 2, 2018permalink

CarlosMP

I'm using a 3rd hand Galaxy Note 4 which came out a year before iPhone 6+ and its still going strong.

Oct 2, 2018permalink

radissimo

I still using Samsung galaxy Alpha from 2014 as my second phone to LG 30+

Oct 2, 2018permalink

Arnold Christopher

It depends on what kind of friends you have. :-)

Oct 2, 2018permalink

My galaxy s5, HTC one all gone within a year. Piece of junk androids.

Oct 2, 2018permalink

Arnold Christopher

@Daniel I had a galaxy S5 that my daughter still uses. Works just fine. Im using Nokia 7 plus but i miss the ir blaster of the s5. So useful for remote control.

Oct 4, 2018permalink

princecody

Who makes the iPhone camera? Samsung?

Oct 1, 2018permalink

No, IPhone screens are made by Samsung.

Oct 1, 2018permalink

ABW

Actually LG in this case.

Oct 2, 2018permalink

tangbunna

Sony made the camera. but tweeked by Apple

Oct 3, 2018permalink

mailman88

Apple ....are we making 300% profit?

Oct 1, 2018permalink

Daryl-G

Because all the research and software development is completely free?

Oct 1, 2018permalink

Mailman is a simple man, he is going to buy these parts in bulks and sell them as portable phone camera.

Oct 2, 2018permalink

Charrick1

Sure, that's what the PHONE ITSELF costs to make, but those suicide nets don't pay for themselves!

Oct 1, 2018permalink

when the wonders "capitalism" and "communism " meet ... anything is possible

a trillion dollars stashed in an irish offshore hold , and young lives driven to suicide by corporate greed and overwork , while a billion morons are snapping selfies in permanent beauty mode ...

there is an Ad to my left for a protection filter for camera lenses ... the companies name "breakthrough photography " of San Francisco gives me pause......

Oct 1, 2018*permalink

@cosinaphile You were doing so well with the empathy until you called a billion people "morons" just because they use a product you don't feel a need for.

Presumably if any of those "young lives driven to suicide" snapped a selfie, they'd be included in your "billion morons" category.

Also, where is the outrage at the rest of the global business world that use manufacturing labour in low cost regions? Did you know those thousands of factories produce parts and products for many brands?

I ask, because the rants against Apple have that terrible stink of politics.

Oct 1, 2018*permalink

it was the billlion selfie shooters i was aiming for , not a catagory of product user ... but it is a bit over the top ... and i regret the insult hurled at a billion selfie shooters ... it was unnecessary and unkind

you are correct in saying that the suffering is much much broader than
the workers at foxconn

Oct 2, 2018*permalink

Imager of

And the whole phone costs around $100 to make.
This is why they’re a trillion dollar company people. Nothing but pure greed! 🤨

Oct 1, 2018permalink

Sure. Give a man $100 and he'll research and knock up an industry leading update to a high tech device to be delivered and marketed for free.

Now, where did I leave that hammer and screwdriver.

Oct 1, 2018permalink

Article says $390 total bill of materials, and that's just materials, not labor, shipping, boxing, marketing etc. $390 seems high to me.

Oct 1, 2018*permalink

Kondamin

It is really high, apple is making good money on people buying apps though.

Oct 1, 2018permalink

doctor digi

Don't forget the yearly fee for developers having a "store" . Yet the fee is a one-off payment and far less to have a Google Play merchant account.

I hope Apple implode one day - and that day can't come soon enough.

Oct 1, 2018permalink

tkbslc

Yeah, so? $40K of lumber builds a $400k house.

Oct 1, 2018permalink

Ribbit74

Yeah the part breakdowns don't include labor, R&D, etc. I mean the whole iPhone XS costs a couple hundred dollars to make; but the very first iPhone XS cost millions.

Oct 1, 2018*permalink

MyReality

Yeah, so? A house almost never depreciates like tech in the long run.

Oct 1, 2018permalink

Remember the film NEEDFUL THINGS..?

Gaunt, a creepy older man moves to a small town and sets up shop. Bad things soon follow. Gaunt has the remarkable ability of selling people exactly what they want most. Through Gaunt's manipulation his ideal purchases come at a price that involves more than just money. ,

Oct 1, 2018permalink

<- Real world that way | Imaginary film world that way ->

Oct 1, 2018*permalink

Yes,
While needful things' prices go that way +++++
:)

Oct 1, 2018permalink

Mssimo

Seems like $120 goes to samsung for the screen. This makes it the most expensive part of the phone.

Oct 1, 2018permalink

Gannon Burgett (Old)

Yea, that and the RAM tend to be some of the most expensive components. OLED still has a comparatively high failure rate during mass production, so that drives up the price of the screens (not to mention the R&D that goes into them.

Oct 1, 2018permalink

NJOceanView

"Combined, all of the camera components inside iPhone Xs and Xs Max devices represent approximately 13 percent of the total BOM..." I would love to know if this includes the software that adds the computational aspect to the capture.

Oct 1, 2018permalink

i dont see this as click bait at all ... its simply a number connected to the camera assembly ... the monetization...

no one here is so stupid as to disregard the insane amount of research and development necessary to create complex technology or to amortize the salaries and facilities costs and the myriad other costs linked to developing and building a phone.

but its cool and harmless to know that it begins with a bill to the manufacturer for 51 dollars and 10 cents ....lol

Oct 1, 2018*permalink

Aha! Ha! Ha! Now iPhone owners know they got cheap $51.00-and-change camera they are now looking at the picture quality differently ...

YES ... PICTURE QUALITY IS directly proportional to the price according to wisdom of marketing.

So, which came first the outing of $51.00 camera or the aggressive beautification of iPhone camera?

After the cost breakdown ... the cheap $51+ camera ... extreme aggressive beautifulication of front facing camera ... I now look at iPhone IQ differently: CHEAP LOW QUALITY IMAGE QUALITY

Oct 1, 2018*permalink

lol ........im of the opinion that in the case of the iphone camera .....ya get what ya pay for....

oooo an ad for bulk banana chips ....gotta go

Oct 1, 2018*permalink

The bill of material for any camera is a lot lower than the MSRP...

Oct 1, 2018permalink

@Mariano Pacifico. Parts produced in large volume for electronic devices are always "cheap". That doesn't mean that the cost of research, engineering and programming is cheap.

That also goes for your top of the line camera if produced at high volume.

Think of it another way. Your most beloved electronic device is nothing more than bits of metal, plastic and other things "cheap". Guess what makes it special? Yes, that part you evidently don't understand :D

Oct 1, 2018*permalink

Nikon Z7 and Canon R should be produced in large volume so their prices drops. It is called economy of scale. And another economic principle that applies here is law of demand and supply. Makes sense. But Nikon Z7 and Canon R not producing large quantities.

Oct 2, 2018permalink

mikan

I find this sort of article misleading. Sure, the hardware part of the camera is probably fairly cheap. But all the investment Apple made into the software development for the Computational Photography, that's really very expensive.

Edit: I am a software engineer, so I mentioned only software development above, but there is a hardware development cost, too.

Oct 1, 2018*permalink

JT26

Fair point there.

Oct 1, 2018permalink

indeed mikan .... completely true

Oct 1, 2018permalink

dbronson

yes, i agree that its misleading...i read a similar article about Bose speaker drivers and how cheap they were compared to the system retail price...but they researched, developed etc the heck out of it and created a debatable great sounding system. ( my post is not about sound quality, or lack there of, but i do believe they created quite a unique sound).

Oct 1, 2018permalink

Hachu21

Also, do not forget that this cost is for the most part very low because of the volume plan to be produced. We are talking hundred million units here.

Such mass production costs are not comparable with smaller series, even Canon ones.

Oct 1, 2018permalink

To be fair, they also weren't saying that whatever cost is added at sale is pure profit - they do reference the whole supply chain, even if they don't list every step in that chain, or go into company expenses as a proportion of profit.

It's a short article, I think you can extrapolate other expenses - the point was the hardware cost of a camera in a phone noted for taking good pictures.

Oct 1, 2018permalink

samualson

In my opinion , no phone on planet earth is worth anywhere remotely close to 1K

Oct 2, 2018permalink

matt1941

also considering the fact we are talking about MILLIONS of cameras ordered..economy of scale massive here.

Oct 2, 2018permalink

Nojo

Nonsense, software investment is a fixed cost. Apple has software engineers that are constantly tweaking it's applications to conform to hardware changes or to add new features. It isn't like they throw out the entire camera program, hire new workers, and start from scratch with each iteration.

Oct 2, 2018permalink

Vallkar

Software without a hardware is completely useless, Once software is developed and sell it to millions the cost per unit comes down to very little.

Oct 2, 2018*permalink

Gmon750

Complete clickbait. Is this the new level that DPR is lowering itself to?

With that idiotic mentality, a car is probably about $4,000 in steel, rubber, plastic, and glass.

Your desktop computer is probably about $300 in plastic, metal, gold, fiberglass and copper.

Apparently... you think this components just magically build themselves, and disregard the hundreds of thousands of man-hours, the salaries of the employees that designed them, the machining and technologies employed to manufacture that "$51.10" camera.

Just another reason why I read less and less of your articles.

Oct 1, 2018*permalink

I don't really understand your objection, and the fact that people are liking your dull, predictable rant, is disappointing.

If you're smart enough to understand that the article figures are not the whole story (as implied by your rant) then you can extrapolate the cogent details for yourself, surely.

I, for one, find it interesting to know the hardware cost of a camera going into a phone noted for it's photographic prowess. We're all smart enough to know that this isn't the full story, and for pitty's sake the article also acknowledges that (did you read all of it?)

Perhaps you'd all have been happy if DPReview had published an essay on the entire Apple business model, with all the steps and costs involved in making and shipping a phone, but c'mon.

Oct 3, 2018permalink

Wes

These types of pointless, click-bait articles are just designed to get people angry and generate comments. They are a single cherry-picked data point with absolutely zero context. This is a shady excuse for journalism.

Shame on you DPReview for sinking to the lowest level for clicks.

A camera... and a phone... are so much more than the financial sum of their parts, and you damn well know it.

Oct 1, 2018permalink

Yes, the camera 'only' costs $51.10 because there are a bazillion of them made. Simply economy of scale. The 'camera' is also more than the sum of it's dissected components.

Oct 1, 2018permalink

Funny thing that you mentioned "Dissected Components"
Read this:
The current monetary worth placed of the basic “elements” in an individual human body is $4.50: $3.50 for the skin and the remainder of the worth assigned in the aggregate to the major elements — $1.00. Almost 100 years have passed and the difference is only 16 cents from Dr. Charlie’s long ago calculation!

Oct 2, 2018permalink

I think that is a very good analogy and we are certainly more than the "sum of our parts". And to think evolution has come up with Homo Sapiens Sapiens without any design costs, ha. But the cost of trial and error has been a doozy.

Oct 2, 2018permalink

@LaPolma - Not sure where you're going with that? But to think that parts could somehow 'sum' themselves together in a design that works is an astounding idea.

Oct 2, 2018permalink

Yes it is, and that’s what evolution is, although somewhat counterintuitively, all about.

Oct 2, 2018permalink

Hugely counter-intuitive and improbable.

Oct 2, 2018permalink

Very improbable... but nonetheless verifiably true... wouldn't make any sense if it HAD a a designer.
Anyway, off topic, my fault. I just meant to say that I agree with what that person said. That it IS a bit misleading and almost meaningless to talk about the "worth" of any individual component of an iPhone. To coin a phrase, there is so much more to it than that.
But that doesn't mean you still can't get ripped off by somebody. I guess that brings up the whole question of what is fair and who decides. You may now break off and discuss tangentially the question and definition of monopoly. (Not accusing Apple). You may... but I don't feel like it at all, haha.
But I don't think it's a totally ridiculous thing to know about. It is, after all, an important part of the bottom line. But hey, then again...if they make a great product and people will, within reason, pay for it. Then maybe it's hard to get TOO upset.

Oct 2, 2018permalink

"Very improbable... but nonetheless verifiably true... wouldn't make any sense if it HAD a a designer."

Yeah, doesn't make sense that the iPhone HAD a designer either.

"That it IS a bit misleading and almost meaningless to talk about the "worth" of any individual component of an iPhone."

Agreed. However, picking on the iPhone is a great way to generate traffic

"But I don't think it's a totally ridiculous thing to know about. It is, after all, an important part of the bottom line. But hey, then again...if they make a great product and people will, within reason, pay for it. Then maybe it's hard to get TOO upset."

Same can be said for any product made. It's just very popular to pick on iPhone.

Oct 3, 2018permalink

To: Kevin Barret
"..Same can be said for any product made. It's just very popular to pick on iPhone."

Mel Brooks, on his 2000 Year Old Man, mentions that he had some good business making the David Star Symbol. He employed six guys and sales were good. One day someone came with this new symbol: a cross. "C'mon.." He said, This will never pick up sales compared to the beautiful Star. He admitted he was wrong.
When I saw this new square thing named IPhone, I told to myself the same: If portable phones were made to be anatomically designed for the hand, how could people accept talking to this square shaped thing?
Boy, I was so wrong.

Oct 3, 2018permalink

Not really sure what you're saying there about my first remarks, Kevin. And I shouldn't get into it again here but again, my fault. I don't think I expressed myself very coherently... merely saying that with biological evolution ALL of the evidence suggests and indeed necessitates that there was no designer. While of course by necessity with the iPhone there was. Somewhere way back there I think I tried to say something semi-amusing comparing the two.
But they do have this in common...when something goes really wrong it's impossible to find the entity responsible. ha. Take care...didn't mean to get off on this tangent.

Oct 4, 2018permalink

"merely saying that with biological evolution ALL of the evidence suggests and indeed necessitates that there was no designer. While of course by necessity with the iPhone there was."

Every shred of evidence demonstrate that biological organisms are infinitely more complex than any iPhone that every was or ever will be. Yet, by necessity there was no designer for those. On the other-hand, the existence of an iPhone necessitates that it had to have one. Got it!

Anyway, this is a tangential topic for another forum for another day.

Take care my friend.

Oct 5, 2018permalink

Well, thank you old sport. It’s good to have a civil conversation at any time on the internet. I am a semi-recent convert to civility online, haha. No, I don’t post much but I have realized quickly that it is easy become confrontational and to take offense even where none was intended.
Anyway, how DID we get this far off topic? Ha. But I’m sure no-one will mind much if I try to sneak in the last word. Haha.
OK, I’ll stipulate right here that no matter what I say...you get the last word...because I started it anyway.
...uh...OK, what I’m saying is that evolution demonstrates in countless instances that what WORKS is not necessarily the best design at all. (To be continued ha, then I promise you get the last word)...

Oct 5, 2018permalink

....( continued) ...Not being a biologist I can’t recommend that I get too deeply into detailed examples, but I know that for one... had there been an even above average designer behind the intricate workings of the physical human heart, ummm...they would NOT have designed it that way. But nonetheless, through natural selection (and it only makes sense if you use the “natural selection” model)... the damn thing works.
Not as well as it COULD work and very prone to sudden mishaps...but amazingly it works. Which is not to say some things don’t end up appearing to be so well suited that they must have been by design. Look at the eye, uh, sorry... gorgeous, but NOT the way it would have been made if by a supreme being sitting down and figuring the best, most efficient and long lasting way to do it. OK, I’m outta gas haha. Good talking to you, really.

Oct 5, 2018permalink

No, I'm not one of those guys that needs to have the last word :)
Last thought on this thread. Look up "Irreducible Complexity"

Oct 8, 2018permalink

I have, and I’m afraid it is bunk. But in an effort not to make this personal I would just say that I really think it would be a good idea if we all, as intelligent educated people...were to endeavor to live in a reality based universe. In the long run that is best. That means one must be open to and willing to take the time to see if their arguments really hold up to experiment and logic. And whether or not it may be time to give up the ghost. The Holy Ghost as it were.
And what this apparently infinitely reducible “god in the gaps” argument has to with Christianity or any other religion as we know it...I don’t know. The Dude Upstairs certainly has a funny way of “guiding” us...by eternally hiding out, never even creaking the floorboards. What the hell is “he” doing up there?
If you tell me it is a method of increasing the need for “faith”... I’ve got a Yugo here for ya that purrs like a kitten I’ll let go for a song. (It’s not you, I’m just blowing off steam) continued...

Oct 16, 2018permalink

Now we get into deism, wherein a “hands off” god just gets the ball rolling leaving us to figure it out. Again, hardly Christianity as we know it. In practical terms there is no difference between that and a natural explanation for the universe. That’s what most of the enlightenment era Founding Fathers fell back on... as reason would not let them accept all the other bull but Darwin and evolution was still waiting in the wings.
And so...it is up to us. I find that much more noble than a reliance on an eternally absent authority figure. If you’ve got 10 minutes...check out this concise little video...
https://www.theguardian.com/science/punctuated-equilibrium/2011/jan/10/2

Oct 16, 2018permalink

scoobysnapstories

most i would spend just for texting email and take memorable photos that just ends up on ig not even prints 300$ lesson learned. but spending money for a camera who makes fake bokehs. naaaaaahhh. and more reason not to buy an iphone, a 50$ CAMERA?!?!? man.

Oct 1, 2018*permalink

Retzius

If you are in any way mad about the "BOM" of a phone I dare you to check out the "BOM" of a government project. Hint: those roads and bridges don't really cost billions of dollar to build

Oct 1, 2018permalink

Apple learned from Government.

Oct 1, 2018permalink

Unsure if that's true about roads and bridges. But on DOD programs, the defense contractors typically are allowed only a 5-12% profit on "cost-plus" contracts (development contracts - no company would build a F35 at fixed cost, nor would the gov't want to do it that way because then they'd not be able to make any requirements changes (not affordably anyhow) along the way if it was fixed price with fixed requirements).
If it's a manufacturing contract (fixed price), then the contractor can make whatever they can mange to make on it (unless only one company can supply the product, in which case again the gov't greatly limits the profit...F35 for example, obviously nobody else can make it for less at this point).
That's why companies do not want to do gov't work - the hassle is not worth the low profit margins. Can utilize their engineers to make more profit on other work.

Oct 1, 2018*permalink

Bhima78

@Retzius
That is likely the case for companies like Haliburton that received no-bid contracts, but for the rest of us plebs that fill out 100+ page proposals for government research grants, every single nickel and pence is accounted for and is extremely transparent in the breakdown budget on the proposal, and every time you invoice after winning a contract.

Oct 2, 2018permalink

CaPi

Non News.
No RD cost. No enormous softwar dev effort esimation
a lot of BlAh

Oct 1, 2018permalink

$51.10 camera !!! And it shoots awesome pictures !!! Outstanding videos !!! Excellent microphone !!! Better than GoPro !!!

I wonder who made the camera at such a very very very cheap price.

Oct 1, 2018permalink

BlueBomberTurbo

Yes, the CAMERA is $51. Now add the price for the processor, RAM, card slot (oops!), display, buttons, touch interface, chassis, etc. Pretty much half of an iPhone, and you get a GoPro with poor stabilization. ;)

Oct 1, 2018permalink

msheikh921

Sony did....

Oct 1, 2018permalink

It's not a $51 camera (retail price). The PARTS cost $51... Do you think your $2000 DSLR has $2000 in parts inside it and Nikon thus makes zero profit?

Oct 1, 2018permalink

FasterQuieter

I read that it might be a Samsung part this time.

Oct 1, 2018permalink

Even Samsung use SONY camera stack. Samsung keep boasting its tech but we never see it until late in a model's life when reviewers aren't reviewing the phone anymore.

Oct 2, 2018permalink

Jake2046

even with R&D...that is still quite a high mark up!

Oct 1, 2018permalink

arbux

Yes. There is also software.

Oct 1, 2018permalink

You are paying for retina display ... software ... developers ... designers ... and ... AN ARMY OF LAWYERS to fight off patent infringement ... and payments for settlements !!!

... AND CONSUMERS ARE PAYING FOR IT ... !!!

Oct 1, 2018permalink

Akgbkd

"rertina display" stop talking like fanboys.... it's just a stupid term coined by apple....almost every device half the price of iphone has "retina display".

Oct 1, 2018permalink

onlyfreeman

What is retina display, above 300 PPI?
My Moto G from 2013 has the exact same pixel density as the new iPhone XR. That's real value.

Oct 1, 2018*permalink

the retina display ... a term only "geniuses" could think up ....lol

marketing hogwash for 4 year old android technology

Oct 1, 2018*permalink

PLShutterbug

&onlyfreeman: “Retina Display” is whatever Apple says it is, because it is a marketing term they made up.

Oct 1, 2018permalink

Markup seems small to me if $390 is just the parts, not the cost to manufacture them into a phone, transport them, package them; etc.

Oct 1, 2018permalink

Jake2046

"As a comparison, Samsung's Galaxy S9+ with 64GB of RAM has a BOM of $375.80 and retails at around $840."

Yeah, Apple definitely maximizing their profit.

Oct 1, 2018permalink

Bhima78

You don't become a $1 trillion dollar company by just giving your product away.

The retail price of an iPhone, or ANY phone is based on consumer's demand to pay for it. If you think the markup is too high and the product isn't worth that cost, there are plenty of solid alternatives that sell for much cheaper prices and lower margins.

I'm running a $200 Nokia 6 for the past 2 years and it works great for my needs. I don't care that its camera module is crap since I carry a real camera.

Oct 2, 2018permalink

mick232

Given the low costs of the hardware, the resulting image quality is quite impressive. This is presumably due to very clever software and processing. Traditional camera manufacturers should take notice.

Oct 1, 2018permalink

BlueBomberTurbo

Zeiss already has Lightroom loaded into their new camera. ;)

Oct 1, 2018permalink

What if the current crop of $2000 FF camera only have $500-$700 in parts? Only expensive part is the sensor, and they do not cost $1000....

Oct 1, 2018permalink

You should see Pixel 2 XL with and without HDR. Without HDR, the image is crap. Soft, muddy and low contrast. With HDR: wow, nice!!!

Google went full budget mode on the hardware but delivered on the software

Oct 2, 2018permalink

mick232

In photo world, you'd be told: buy a better camera, a better lens and improve your skills.

In smartphone world, the software takes care of it.

Oct 2, 2018permalink

BlueBomberTurbo

"In smartphone world, the software takes care of it."

If you're lucky. The results are very random, and many times it takes a few shots to get what you're expecting, if ever at all. I've found that Open Camera, while not as good overall IQ wise, has much more convincing HDR. Again, it may take multiple tries to get something good, where as on mirrorless, it's one and done.

Oct 2, 2018permalink

and worth every penny

personally i prefer cameras where 100 percent of the cost of the device is related to the camera rather than 8.6 percent or lucky 13 percent

Oct 1, 2018*permalink

arbux

But it isnt. That BOM didnt include case, procesor, mainboard, lcd screen etc. Sensor in yor camera doesnt cost 100% either.

Oct 1, 2018permalink

I didn't say sensor in my post and neither did the article headline

my Fuji cameras and Olympus and Ricoh cameras devote 100 percent of the cost to the camera .... that of course includes the sensor and electronic assemblies, and power, and storage related to supporting it ... but further on the salaries of employees, corporate debt, cost of facilities, and r and d , etc
even for some advertising...

in dedicated cameras, all these costs are legitimately connected to the camera from shell to sensor, but in a phone, it remains a fraction

as for the cost of the" camera " headline above ... id say the camera inside any cellphone isn't worth much more than 50 bucks anyway

plastic lenses the size colored confetti and sensors the size of a lentil \support electronics for it shouldn't cost much, based on what I see of image quality from a phone. ....50 bucks .?... didn't buy much of a camera then .... and does not now, either.

Oct 1, 2018*permalink

you're excluding the screen's cost for the phone, but not for your traditional camera...and the case and other common parts.

A $200-$300 P&S camera has a similar sensor as phones and a larger lens....obviously they can't sell it for $300 if it cost over $150 just for the parts!

Oct 1, 2018*permalink

the camera sensors are smaller and poorer and lack basic componants like glass lenses and apertures .............but yeah

Oct 1, 2018permalink

Bhima78

@cosinaphile
Honestly, cameras today are no different in their guts to a smartphone. You ARE paying for the CPU, RAM, battery, motherboard, microphone, speaker, operating system development, 2 screens if mirrorless, body and the sensor. The main difference is really the form factor and the OS loaded on the camera vs. a phone--and a cellular network device on the mainboard.

Oct 2, 2018permalink

Sean Tubridy

I guess I'm not sure how I'm supposed to feel about this information. I suppose I'm glad such a large percentage goes toward the camera but surprised all that tech is so cheap.

Oct 1, 2018*permalink

PLShutterbug

That is the problem with this kind of reporting. Without context it is hard to make a value judgement- at least it is if you actually give some thought to what you are reading.

Another problem is that most people have no idea of the cost of goods sold (CoGS) for any product they buy, and they think that what they pay for something is the actual cost to build it. There is no thought towards the soft costs: R&D, manufacturing, raw materials cost, marketing, paying a sales and administrative staff, or any of the myriad other costs to keep the infrastructure going that supports the sale and managements of a product. Additionally they don’t consider that they are also paying for a company to consider it worthwhile to stay in business (otherwise known as “profit”). If they did, the kinds of comments appearing here would be uncommon.

Oct 1, 2018permalink

How much do you think the parts cost for a $300 P&S camera with a similar or even a larger sensor? Has to be well under $150 to make a profit I think that is pretty standard (and always has been).

Oct 1, 2018permalink

$300 P&S's BOM might be way cheaper than $150. Lower-end models are often designed by ODM in China and not actually Nikon/Canon/SONY you see on the label

Oct 2, 2018permalink