iPhone 8, iPhone 8 Plus Cost More to Make Than Previous Models, Says IHS Markit

While the near bezel-less iPhone X took the spotlight away from the iPhone 8 models at Apple's launch event earlier this month, the company seems to have invested quite a bit into the last year's successor models as well. As per a report by IHS Markit, the bill of materials (BOM) cost for both iPhone 8 and iPhone 8 Plus have turned out to be more than iPhone 7 and iPhone 7 Plus at their respective launches.

In terms of design, there might be stark similarities between the last and this year's iPhone models but as it turns out, the total cost to make an iPhone 8 Plus comes out to be $17.78 (roughly Rs. 1,200) higher than that of the iPhone 7 Plus (32GB entry-level variant) while the total cost to make an iPhone 8 turned out to be $9.57 (roughly Rs. 600) higher than the iPhone 7 at the time of release, a [teardown]( https://technology.ihs.com/595738) by IHS Markit has revealed. The total manufacturing cost for the iPhone 8 Plus came out to be $295.44 (roughly Rs. 19,300) while that for the iPhone 8, it turned out to be $247.51 (roughly Rs. 16,150).

If we take unsubsidised retail prices into the comparison, the 64GB storage variant of the iPhone 8 starts at $699, which is $50 more in comparison with the starting price for the iPhone 7 at launch. The iPhone 8 Plus, on the other hand, starts at $799, which is again $30 higher than that of the iPhone 7 Plus at launch.

The research firm says that that the price differential dropped from $120 between the iPhone 7 and iPhone 7 Plus last year to $100 this year on the iPhone 8 and iPhone 8 Plus.

"The higher total BOM cost for the iPhone 8 Plus can't be tied to a single area or feature. The higher cost is the result of slower annual component cost erosion tied in with additional features," Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit, was quoted as saying in the report. "From a teardown perspective, the biggest cost adders would be the increased NAND flash memory content and new wireless charging components."

Apart from the factors mentioned above, the research firm says that the optics on the new smartphone also attributed to the overall increase in the price of the components.

"From our BOM analysis, we can see that Apple invested heavily in the camera capabilities of the iPhone 8 Plus due to the increase in component costs," said Wayne Lam, principal analyst, mobile devices and networks for IHS Markit. "Based on these investments, we expect improvements not only in the optics in the dual camera module, but also in computationally intensive requirements of the portrait lighting capture feature that rely on the graphical horsepower and neural engine (AI) of the A11 Bionic chip," he was quoted as saying.