Production of Apple iPhone 14 costs 20% more than iPhone 13

Apple’s new iPhone 14 series is now official and we got as many as four new models this year. But as we highlighted the difference between each iPhone in our iPhone 14 series explainer, the regular iPhone 14 doesn’t bring a lot to the table compared to last year’s regular iPhone 13. And now, a new report has revealed some interesting details regarding its production, which is apparently 20 percent more expensive than its predecessor.

Apple iPhone 14 is 20% more expensive to make than iPhone 13

iPhones are getting more expensive. Excluding China and the United States, Apple increased prices for iPhone 14 models in almost every country. And it looks like customers in China and the US will soon have to pay more as well. A pair of reports this week have revealed how iPhone manufacturing costs are increasing significantly, and they will affect Apple in both the short and long-term.

Nikkei Asia revealed component prices for the latest iPhones soared 20%, reaching an all-time high. Production of the iPhone 14 Pro Max costs $501, a huge increase from the $461 cost of its predecessor, and the main reason is the A16 Bionic chip, costing $110 alone.

Prices for the Pro Max model have varied between $400 and $450 since the introduction of the model in 2018, Nikkei wrote. The news website made the logical assumption that if Apple is taking a hit in the manufacturing cost while not touching its US prices, the company is likely to get a hit in profits.

The production costs for the iPhone 14 range soared by about 20% compared to iPhone 13 models. The chief culprits are new Sony CMOS camera sensors, which have increased by 50%, and the A16 Bionic chip used in the iPhone 14 Pro and Pro Max, which at $110 is almost 2.5x more than the A15 used iPhone 13 Pro and entry-level iPhone 14 models.

Components for the iPhone 14 devices from US-based companies compromise almost a third of the total cost and are up 10%, compared with 2021. South Korea is the second-biggest provider of components for phones, and the switch is mainly due to Apple developing its own products, such as the chipset. Furthermore, the inclusion of the new Sony CMOS sensors also further hike the prices. These new sensors are around 30 percent larger in size than last year’s sensors, and are also around 50 percent more expensive as well, with a production bill of 15 US Dollars.

The largely unchanged iPhone 14 undoubtedly helped Apple subsidize iPhone 14 Pro costs in the short-term, but that only delays the problem because iPhone 15 base models will adopt the A16 in 2023. Interestingly, a third of the Apple iPhone 14 lineup is sourced from US based companies, with the components also seeing an overall hike of around 10 percent as well. The teardown revealed there are no extra hardware components for the emergency SOS function, because it is software-based, meaning it might reach more markets in the near future.