iPhone 8 and 8 Plus retail prices $50 and $30 higher,
respectively, than previous models
The new Apple 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
Markit (Nasdaq: INFO), a world leader in critical information,
analytics and solutions.
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Exploded view, iPhone 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, 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
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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