The iPhone 16 Pro Max costs Apple less than half its retail price

Apple continues to make significant profit margins with its latest flagship model, the iPhone 16 Pro Max. A recent report from the TD Cowen agency reveals that the manufacturing cost of this device is $485, while its retail price starts at $1,199, leaving the company with more than double the profit for each unit sold.

Despite being more expensive to produce than its predecessor, the iPhone 15 Pro Max, which cost 7% less to manufacture, Apple continues to optimize its processes to keep costs down. According to the analysis, the screen and the rear camera module are two of the components that have contributed the most to the cost reduction, representing only 16% of the total, while other elements such as RAM and SSD storage slightly increased the cost. final production price.

In addition to technical improvements, Apple’s premium pricing strategy, which places a high value on its products to generate a perception of exclusivity, remains key to maximizing its profits. However, it must be taken into account that these margins not only cover manufacturing costs, but must also include investments in patents, licenses and employee payroll, which partially reduces the net profit.

However, the iPhone 16 has not had the expected takeoff in terms of sales. During its pre-sale, demand fell 13% compared to the iPhone 15, with a notable drop of 27% in the iPhone 16 Pro model. The expectation generated around the future features of Apple Intelligence, which will arrive with the updates of iOS 18 could be a key factor in reactivating sales in the coming months.

Despite the initial decline, Apple is confident that its latest model can regain ground in the market, especially with the introduction of new artificial intelligence capabilities that the company believes will make a significant difference in the user experience.