Apple’s new A16 Bionic chip costs over 2.4 times more than A15 Bionic

The iPhone 14 Pro and flagship iPhone 14 Pro Max exclusively feature Apple’s A16 Bionic chip each of which costs $110, over 2.4 times more than the A15 Bionic used in last year’s iPhone 13 Pro and iPhone 13 Pro Max.

A16 Bionic: The Fastest Chip in a Smartphone
Apple’s A16 Bionic: The Fastest Chip in a Smartphone

Minatake Kashio of Fomalhaut Techno Solutions, a Tokyo-based research company, helped Nikkei Asia examine three models in Apple’s iPhone 14 series and found that production costs have soared about 20% from its previous model to an all-time high.

Norio Matsumoto for Nikkei Asia:

Fomalhaut estimates that production of the iPhone 14 Pro Max calculated in terms of parts cost $501 — up more than $60 from that of the iPhone 13 Pro Max that went on sale last year. While parts prices for high-end Max models have hovered between $400 and $450 since they debuted in 2018, the latest model represents a steep production cost rise of over $60. The cost of the iPhone Pro 14 Max is thus the highest in terms of both total and the margin of increase since 2018.

In the U.S., however, the iPhone 14 Pro Max with the smallest storage capacity sells for $1,099 — unchanged from its corresponding 2018 version, the XS Max. The company seems to have decided to eat added production costs rather than passing them on to consumers.

The higher production cost is mainly due to the A16 Bionic chips used in the iPhone 14 Pro and Pro Max models. The proprietary chip costs $110 — over 2.4 times more than the A15 version used in the iPhone 13 Pro Max released last year.

The iPhone 14 also features new camera components including Sony Group’s CMOS image sensors. The sensors are up to 30% larger than those found in previous models and priced about 50% higher at $15… These and other high-performance camera components give iPhone the means to take bright, vivid pictures in a wide range of lighting environments.

MacDailyNews Take: Interestingly, the examination found that the most iPhone 14 component costs now come from U.S. suppliers, (32.4% of parts costs, up about 10 percentage points YoY). Last year’s number one iPhone 13 supplier, South Korea, saw its component cost share drop by more than 5 points to 24.8% this year. According to Nikkei, an increase in the share of Apple-made components contributed to the rise in the ratio of procurement from the U.S.

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[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]

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