The research company said its “preliminary physical dissection” of the A1865 model of the iPhone X with 64GB of internal storage — which retails for $999 — shows that it carries a bill of materials of $370.25.
In contrast, Samsung’s Galaxy S8 with 64GB of storage costs $302 in materials and retails at around $720.
Andrew Rassweiler, senior director of cost benchmarking services at IHS Markit, said the screen of the iPhone X and its TrueDepth sensing system contribute to its higher cost.
The most talked-about feature of the iPhone X is Face ID, a facial recognition system that replaces Touch ID fingerprint recognition. This is built around the TrueDepth camera, which is housed in the black notch at the top of the handset and uses an infrared camera to project more than 30,000 invisible dots to map the user’s face.
Jérémie Bouchaud, senior director for MEMS and sensors at IHS Markit, said Face ID is a complex assembly that uses components from many suppliers, although the basic functionality is similar to Microsoft’s Kinect sensing system, which used a flood illuminator, dot projector and infrared camera.
The teardown of the iPhone X revealed that its IR camera is supplied by Sony/Foxconn while the silicon is provided by ST Microelectronics. The flood illuminator is an IR emitter from Texas Instruments built on an application-specific integrated circuit (ASIC) and single-photon avalanche diode detector from ST Microelectronics. Finisar and Philips manufacture the dot projector. IHS Markit puts the hardware cost of the TrueDepth sensor cluster at $16.70.
“The assembly and testing of the TrueDepth system and its individual components is challenging and likely a factor in the production delays,” Bouchaud said. “For instance, the assemblage and test of the Texas Instruments and ST Microelectronics subsystem for the flood illuminator is far from trivial and requires a high number of test equipment pieces.”
Another big cost is the 5.85-inch 19.5:9 aspect ratio AMOLED display on the iPhone X. IHS Markit estimates the cost of the display module, which includes the cover glass, AMOLED panel and Force Touch sensor, at $110 — almost a third of the total hardware cost.
IHS Markit said it thinks that Apple is maintaining its typical hardware margins for the iPhone X, but said “that gross margin may increase over time as manufacturing yields improve”. The $370 doesn’t include a number of costs such as research and development, marketing or manufacturing.
According to HIS Markit, Apple’s iPhone 8 Plus has a bill of materials cost of $288.
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