What will the iphone cost

The Economics of the iPhone

What Are the Economics of the iPhone?

It’s estimated that more than 900 million people in the world own an iPhone.   From our culture to the economy, the small, handheld device has made a splash, changing the way we live, and that influence is likely to continue.

Apple Inc. (AAPL) unveiled the XR and XS in 2018, which was the company’s cheapest phones in recent years.     Meanwhile, the iPhone X saw its international launch with a $999 price tag.   In 2019, Apple unveiled its latest iPhone with the iPhone 11, which has a dual-camera lens and the iPhone 11 Pro along with its three camera lenses. 

However, Apple’s greatest product has also been its greatest curse. The iPhone makes up approximately 50% of the company’s total revenue, meaning the company is at the whim of the mobile smartphone market. As a result, Apple has been busy creating ancillary services and products that complement the iPhone. 

With all of the products and services intertwined, it’s made it challenging for investors to determine, just how much money Apple earns from iPhone sales.

Key Takeaways

• Sales from the iPhone make up more than 50% of Apple’s total revenue. 
• Although it’s estimated that 900 million people own an iPhone worldwide,   sales were down in 2019 versus 2018. 
• Apple’s services and wearables businesses grew by 16% and 41% respectively, which indirectly adds new revenue streams for the iPhone. 

Understanding How the iPhone Makes Money

Investors and analysts can not easily calculate how much profit Apple earns on each product. Apple, in the past, had reported unit sales for each product. However, the company has stopped that practice and instead, reports revenue by product. The table below contains the products and services revenues for the past three years. The data was pulled from the company’s 10K report on September 28, 2019. 

• Apple reported $260 billion in revenue for the end of the company’s 2019 fiscal year–highlighted in green in the table below.
• The iPhone generated $142.3 billion in revenue in 2019, meaning the iPhone represented approximately 55% of the total revenue for the year.
• The iPhone revenue declined in 2019 by 14% versus 2018. However, revenue for 2017 was an 18% increase from the year prior. 

Apple is one of the most valuable companies to date, yet more than 50% of its revenue depends on one product line.

Services and Wearables

Apple has been actively expanding its services business in recent years, which includes iTunes and Apple T.V. The company has also grown its wearables business such as the AirPods.

It’s important to consider that the company’s services and wearables business is an extension of the iPhone and other hardware products. To conclude that Apple had a poor year by only looking at the 14% decline (-$22 billion) in iPhone revenue for 2019 versus 2018 would not be a fair analysis. 

The company also grew its services business by approximately $6.5 billion and wearables by $7.1 in the same period for a total of $13.6 billion. The $13.6 billion only partially offsets the $22 billion decline in iPhone revenue from 2018. However, the services and wearables businesses are growing at faster rates–16% and 41% respectively–versus the decline in iPhone sales of 14% from 2018. In other words, Apple is using the services and wearables business to fill the gap left from iPhone revenue declines. 

The ancillary businesses would not be possible without the hardware products such as the iPhone, which makes determining the overall profitability for the iPhone that much more complex.

What Does it Cost to Build an iPhone?

Apple’s sourcing model is one of the reasons it generates attractive profit margins. The company makes very little of its own products. Instead, components and materials are gathered from around the globe and sometimes even from direct competitors, such as Samsung. This process significantly lowers capital expenses for Apple, saves the consumer a bit of money, and lets shareholders benefit from the difference.

The iPhone 11 Pro Max has a retail price of $1,099 per unit.   It’s estimated that all of the components that make up the iPhone cost approximately $490.50 per phone, according to a report by NBC News. Some of the components include the Samsung battery unit, which costs $10.50, the triple camera costs $73.50, and while other equipment such as the processor, modem, and circuit boards cost approximately $159 per phone. 

A $490 cost and a retail price of $1,099, Apple appears to be earning a $609 profit per phone. However, it’s difficult to determine the actual profit per unit since there are other cost factors that go into making the iPhone. The manufacturing, assembly, software, research, and development costs all must be paid for with the $609 profit per unit. There are also marketing and advertising costs as well as the cost of sales, general, and administrative costs such as the corporate office.

How the iPhone Helps the Economy

Apple took it upon itself to illustrate its effect on the economy and the job market. Apple reports that the company has created a «job footprint» of nearly 2.4 million jobs across the U.S. 

According to Apple, most of the jobs created are in the app economy, which is:

«Currently responsible for 1.9 million American jobs—an increase of 325,000 in the last two and a half years.» 

Apple also employs 90,000 workers in all 50 states and is planning to add 20,000 more jobs by 2023. 

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How Much Does an iPhone Cost? Prices of all Apple Mobiles

The price of the iPhone is (and it seems that it will always be) a controversial factor among many users. There will be those who think they are expensive, that they have a fair price and even those who believe that they are cheap. Now, how much exactly does an iPhone cost in Apple Spain? We will solve this and other doubts in this article so that you can see what this value is and judge these amounts for yourself. And also not only those that are sold now, but we will also see prices of older iPhone that are no longer for sale.

When does Apple lower the price of its mobiles?

Apple not only sells the latest iPhones in its stores, but there are also some older generations that are still on sale. The date on which they usually launch the new ones is between September and November , being at that time when they withdraw some of the previous ones from the sale and lower the price to others. At no more time of the year do the prices drop, which means that there is a lower devaluation of the price on their devices compared to those of other brands.

This drop is usually 100 euros and if the phone is on sale for more years it continues to drop in similar amounts. Obviously you can always find offers in other stores or financing methods in Apple itself that make it possible to buy in a more comfortable way, but in no case that low official price unless the aforementioned circumstance is known. At least this is what has happened over the years.

The iPhones that are still on sale at Apple

These are the Apple mobile phones that the company currently sells through its online store (either on the web or in the app), as well as in physical stores known as the Apple Store. In all of them there is price unification, so you will not find in any of them a variation with respect to another.

iPhone SE (1st generation) prices

This device was launched in March 2020 and since then Apple has not dropped in price at any time, thus remaining the same as in its origin. It is available in three internal storage capacities and up to three different colors: red, white, and silver. Its design is based on the 4.7-inch iPhone 8, although its interior has been updated with an A13 Bionic chip identical to the one that was added in its day to the iPhone 11, 11 Pro and 11 Pro Max.

• 64 GB of storage: 489 euros
• 128 GB of storage: 539 euros
• 256 GB of storage: 659 euros

iPhone XR prices

This phone dates from 2018, as it was introduced and launched at the same time as the iPhone XS. The company has continued to maintain it despite the arrival of new generations, being one of the best options in its catalog in terms of value for money, although some original storage versions no longer have them. It is available in six colors: yellow, coral, red, black and blue. At the time it started from 859 euros, although now these are its prices at Apple:

• 64 GB of storage: 589 euros
• 128 GB of storage: 639 euros

iPhone 11 prices

This phone launched in 2019 saw its ‘Pro’ brothers leave the Apple catalog, but it kept lowering the price of its three storage capacities. It can be purchased in black, green, yellow, purple, red or white. At the time it cost a minimum of 809 euros, but in October 2020 this price was lowered, remaining as follows:

• 64 GB of storage: 689 euros
• 128 GB of storage: 739 euros
• 256 GB of storage: 859 euros

iPhone 12 mini prices

Of the latest generation of iPhone released by Apple, this has turned out to be the cheapest. Since it does not have a natural successor presented, it continues to maintain the same price as in its origin when it was launched (November 2020). It has three storage capacities and six available colors such as black, white, red, green, blue, and purple. That last color was subsequently launched on the market in May 2021.

• 64 GB of storage: 809 euros
• 128 GB of storage: 859 euros
• 256 GB of storage: 979 euros

iPhone 12 prices

With practically identical features as the ‘mini’, this mobile is only differentiated by a larger size and a higher price. Its capacities and colors in which it is available are the same. Regarding the price, we can buy it with the following quantities, depending on the storage capacity they have.

• 64 GB of storage: 909 euros
• 128 GB of storage: 959 euros
• 256 GB of storage: 1,079 euros

iPhone 12 Pro prices

The second best Apple iPhone currently hit the market in October 2020, with a higher price than the previous two, although also with more advanced features such as its base memory capacity that is complemented by two others. It is offered in four colors to choose from: silver, graphite, gold and blue.

• 128 GB of storage: 1,159 euros
• 256 GB of storage: 1,279 euros
• 512 GB of storage: 1,509 euros

iPhone 12 Pro Max prices

This is the most expensive iPhone that exists today, which has been on sale since November 2020 with a price that has not changed a single iota at Apple. Its difference with the small ‘Pro’ is 100 euros in all its capacities, having aspects in common such as the four colors to choose from or the ROM memory that it integrates.

• 128 GB of storage: 1,259 euros
• 256 GB of storage: 1,379 euros
• 512 GB of storage: 1,609 euros

Other iPhones that if they sell other stores

There are other iPhones that, despite not being for sale at Apple, are still being sold in different stores. It is true that their stock is more limited, but they also have cheaper prices than in their departure. Of course, prices can be very different, sometimes finding notable differences between stores. Amazon offers some of them at prices that, as a general rule, are usually among the best on the market.

Here is a list with the price they had at the time when they were launched on the market, so that you can see how much their value has been decreasing compared to that moment. Also a link to Amazon where you can see the current prices of these models, although some of them are sold only reconditioned.

• iPhone 7 (2016):
  • 32 GB: 769 euros
  • 128 GB: 879 euros
  • 256 GB: 989 euros

• iPhone 7 Plus (2016):
  • 32 GB: 909 euros
  • 128 GB: 1,019 euros
  • 256 GB: 1,129 euros

• iPhone 8 (2017):
  • 64 GB: 809 euros
  • 256 GB: 979 euros

• iPhone 8 Plus (2017):
  • 64 GB: 919 euros
  • 256 GB: 1,089 euros

• iPhone X (2017):
  • 64 GB: 1,159 euros
  • 256 GB: 1,329 euros

• iPhone XS (2018):
  • 64 GB: 1,159 euros
  • 256 GB: 1,329 euros
  • 512 GB: 1,559 euros

• iPhone XS Max (2018):
  • 64 GB: 1,259 euros
  • 256 GB: 1,429 euros
  • 512 GB: 1,659 euros

• iPhone 11 Pro (2019):
  • 64 GB: 1,159 euros
  • 256 GB: 1,329 euros
  • 512 GB: 1,559 euros

• iPhone 11 Pro Max (2019):
  • 64 GB: 1,259 euros
  • 256 GB: 1,429 euros
  • 512 GB: 1,659 euros

iPhone already discontinued, how much did they cost?

Many of the iPhones that we are going to see below can still be found in some second-hand stores and may even be completely new in a certain store in some remote part of the world. However, it is not common to find them, much less new. Most in fact have already been declared vintage by Apple for not manufacturing new units and even updating the software, although the iPhone 6s are updated.

The price list that you will see below does not refer to its current value but to what its most basic and highest memory versions cost in Spain on the day of its official launch:

• iPhone (2007): it was not officially sold in Spain.

• iPhone 3G (2008)
  • 8 GB: 199 euros
  • 32 GB: 299 euros

• iPhone 3GS (2009):
  • 8 GB: 329 euros
  • 32 GB: 369 euros

• iPhone 4 (2010):
  • 8 GB: 599 euros
  • 16 GB: 699 euros

• iPhone 4s (2011):
  • 8 GB: 599 euros
  • 64 GB: 799 euros

• iPhone 5 (2012):
  • 16 GB: 699 euros
  • 64 GB: 869 euros

• iPhone 5c (2013):
  • 8 GB: 599 euros
  • 32 GB: 699 euros

• iPhone 5s (2013):
  • 16 GB: 699 euros
  • 64 GB: 899 euros

• iPhone 6 (2014):
  • 16 GB: 699 euros
  • 128 GB: 899 euros

• iPhone 6 Plus (2014):
  • 16 GB: 799 euros
  • 128 GB: 999 euros

• iPhone 6s (2015):
  • 16 GB: 749 euros
  • 128 GB: 969 euros

• iPhone 6s Plus (2015):
  • 16 GB: 859 euros
  • 128 GB: 1,079 euros

• iPhone SE (1st gen. 2016):
  • 16 GB: 489 euros
  • 128 GB: 589 euros

Evolution of the price of the iPhone

This graph refers to what it costs on average to buy an iPhone in Spain since 2008, including even the ‘SE’ models. If we go into detail with prices like those seen in this article, we observe that in certain iPhone categories there has been a stagnation since the price does not fall, but it does not rise either. In specific models we do find some increases such as the passage from the iPhone 11 to 12 which went up, although previously when going from the XR to that 11 it had gone down.

The market trend in the early years caused the price to rise considerably, although the base margin of 1,000 euros was not broken until the iPhone X arrived in 2017. It is precisely this that has set the standard in a certain way. at 1,159 euros for the most advanced versions of the iPhone in recent years.

We must also take into account that in the first years a single iPhone model was launched that was always considered high-end, while lately versions that are still considered high-end have been launched, although with somewhat lower features that help to the price is lower. To consider is also the case of the iPhone SE, which have been launched as reissues of other phones, with similar designs, although with processors adapted to their year that despite everything allow them to be the cheapest mobile phones of the company.

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