[September 25, 2017] |
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IHS Markit Teardown Reveals What Higher Apple iPhone 8 Plus Cost Actually Buys
The new Apple (News - Alert) iPhone 8 Plus, equipped with 64 gigabytes (GB) of NAND
flash memory, carries a bill of materials (BOM) cost that comes out to
US$288.08 higher than any previous versions of the company's
smartphones, according to a preliminary estimate from IHS (News - Alert) Markit
(Nasdaq: INFO), a world leader in critical information, analytics and
solutions.
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Exploded view, iPhone (News - Alert) 8 Plus Teardown by IHS Markit
After $7.36 in basic manufacturing costs are added, Apple's total cost
to make the iPhone 8 Plus rises to $295.44, $17.78 higher than that of
the iPhone 7 Plus. IHS Markit also estimates that the iPhone 8 bill of
materials is $247.51, or $9.57 higher than the iPhone 7 at the time of
release. The unsubsidized price for a 64GB iPhone 8 starts at $699,
which is $50 more than the starting price for the iPhone 7 at launch.
The iPhone 8 Plus starts at $799, which is $30 higher than that of the
iPhone 7 Plus at launch.
IHS Markit is in the process of performing an analysis of the iPhone 8,
which will explain how the price differential on the iPhone 7 and 7 Plus
was $120 last year, while the iPhone 8 price differential returned to
$100.
"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," said Andrew
Rassweiler, senior director of cost benchmarking services for IHS
Markit. "From a teardown perspective, the biggest cost adders would be
the increased NAND flash memory content and new wireless charging
components."
Like the iPhone 7 Plus, the iPhone 8 Plus features a 5.5-inch Full HD
display, an aluminum frame and hardened glass. This year's model
features wireless charging, hence the aluminum uni-body design was
abandoned for a more traditional glass back. The iPhone 8 and 8 Plus are
available in silver, space gray and rose gold.
The introduction of the iPhone 8 and 8 Plus comes at a time when the
major smartphone makers are in a fierce battle for market share.
According to the IHS Markit Smartphone
Model Market Tracker for Q3 2017, the top three smartphone makers
are Samsung (News - Alert), with 23 percent of the market; Apple, with 12 percent; and
Huawei with 11 percent.
"The new iPhone 8 and 8 Plus, and later the iPhone X, are important
devices for Apple and anticipation is running high. Apple's shipments
for the last quarter were flat year-on-year and Samsung's Galaxy S8
devices have been successful in the high-end pricing segment, creating a
competitive environment," said Gerrit
Schneemann, senior analyst for mobile handsets. "The iPhone X stands
to further confirm Apple's grip on the premium pricing tier when it
becomes available in November."
New A11 Bionic chip
One of the main upgrades for the iPhone 8 and 8 Plus is a new
proprietary six-core, 64-bit A11 Bionic chip, which is manufactured
using a new 10nm process. The new chip means the phone runs about 30
percent faster than last year's A10 CPU, runs more efficiently at half
the power, and the battery life is prolonged. The chip is powerful for a
phone of this size, and used to push the phone's augmented reality (AR)
experience.
New neural engine
Apple is putting Artificial Intelligence (AI) to use in the updated the
iPhone Plus camera. Special neural engine in A11 Bionic chip enables a
host of computational photography capabilities in the portrait mode on
the iPhone 8 Plus.
Apple designed CPU and GPU
For the first time, all six cores of the CPU cluster can be activated at
once to crush through operations. The A11 Bionic also features an
all-new Apple designed tri-core GPU that boasts 70 percent better
graphical performance than its predecessor.
Display
The iPhone 8 series will not feature an edge-to-edge OLED display as
expected in the iPhone X. The new iPhones will carry the same LCD
displays as in years past but with new support for HDR (News - Alert) rendering giving
video content higher dynamic range and visual quality.
Wireless charging
The iPhone 8 series are the first Apple smartphones to support wireless
charging, allowing the phones to be charged by placing them face up on a
special mat or tabletop. Wireless charging is typically slower than
corded charging, and requires a plastic or glass back, which can make
the phones more fragile.
Camera updates
The iPhone 8 and 8 Plus have new sensors, with lenses featuring f1.8 and
f2.8 apertures - brighter than the 7 Plus telephoto - in the iPhone 8
Plus. It also has new color filters. Studio lighting includes dropping
the background out completely to black.
The cameras have been calibrated for AR, and the A11 Bionic chip is also
optimized for AR. Gamers will like the spatial audio with sound
occlusion from digital objects in the games, creating a more realistic
virtual world. Slow-motion video capture at 1080p is also smoother, at
240 frames per second - double from last year.
"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."
For more early observations, visit the https://technology.ihs.com/595403/apple-event-insights-analysis.
About IHS Markit (www.ihsmarkit.com)
IHS Markit (Nasdaq: INFO) is a world leader in critical information,
analytics and expertise for the major industries and markets that drive
economies worldwide. The company delivers next-generation information,
analytics and solutions to customers in business, finance and
government, improving their operational efficiency and providing deep
insights that lead to well-informed, confident decisions. IHS Markit has
more than 50,000 key business and government customers, including 85
percent of the Fortune Global 500 and the world's leading financial
institutions. Headquartered in London, IHS Markit is committed to
sustainable, profitable growth.
IHS Markit is a registered trademark of IHS Markit Ltd. All other
company and product names may be trademarks of their respective owners ©
2017 IHS Markit Ltd. All rights reserved.
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