According to a study by the consulting firm specialized in TechInsights technology for the EFE Agency, and which today several Spanish media such as El País echo, high-end mobiles such as the iPhone XR or the Huawei P30 Pro are sold for a price that reaches triple the manufacturing cost. This study sets average sales prices for these terminals of around 900 dollars while quantifying its production at 349 dollars for the Huawei P30 Pro and 346 dollars for the iPhone XR. That is, almost up to three times less.
Of course, this manufacturing cost provided by TechInsights does not represent the total cost of the product at all, since the consultancy has calculated it only from the cost of all the components that make up the terminal. To this, we must add a whole carousel of more difficult quantifiable expenses such as logistics (transport and distribution expenses), marketing, investment in R&D or labor among many others. Therefore, the profit margin is not as wide as one might think.
How much does a brand earn for each mobile sold?
Although the equation is very complicated, a couple of years ago, it was estimated that Apple obtained a profit margin of up to 40% for an iPhone 7, while Samsung, for example, remained at just over 30 %. This was indicated by the World Intellectual Property Organization in one of its reports, estimating that at least 20% of the sale price corresponded to the manufacture of the device.
Crossing these figures with TechInsights data, and in the absence of any brand deciding to reveal such mysterious figures, we see how the vast majority of analysts and consultants choose to set manufacturing costs between 20% and 40% of the final price of sale of the terminal. On the other hand, profit estimates range from those “generous margins” of 40% to more moderate figures of just a few tens of dollars in those low-end Android.
Among all the components that make up the devices, all market studies seem to agree that the processor and cameras are the most expensive parts, with costs of about $ 50 for the chipset and between $ 40 and $ 75 for the cameras, according to its quantity and quality. This is followed by screens with a cost that ranges between $ 20 and $ 30, followed by battery and housing, for about $ 15 each. On the other hand, the sensors can be obtained for a couple of dollars.
Finally, it is estimated that the assembly and testing of each terminal cost less than $ 20, regardless of the brand.