A look at the economics of an iPhone and how Apple became the most profitable company in the world.

Story highlights Price of iPhone X: $999 Median monthly household income: in Brazil: $627

in China: $515

in Nigeria: $222

Over the past decade, the iPhone has transformed Apple into the world's most profitable and biggest technology company.

A host of app developers, chip makers and other industries depend on the Apple economy for survival and business owners, too, want to be able to work on the world's most popular smartphone.

An iPhone is not so much a new gadget but a new technological ecosystem. It's powered by a closed operating system known as iOS, and not even the FBI can gain access to it. This is the key to Apple's success.

But there's also concern about Apple's dominant position with its suppliers and customers. Apple doesn't even have to be price-competitive: with a price tag of $999 its newest model iPhone X is the world's most expensive iPhone ever.

According to analysts at IHS, the cost of the components inside a typical iPhone adds up to around $200.

Apple maintains that this teardown price does not take into account the time and money spent on research, software and transport.

"The iPhone X is very revolutionary ... The price is driven by two factors. The premium smartphone market is very heavily saturated - there's no organic growth - so for Apple the only way to continue growing revenues for iPhone is to actually raise prices. Secondly, the components involved in building the iPhone X are quite limited in supply, so by having a very high price, Apple is also limiting the demand to some extent, and should help curtail any shortages it might have," explains Daniel Gleeson, an analyst at UK-based market analysis firm Ovum.

"This entire range of devices has been extremely good for the entire Apple ecosystem," says Gleeson.

"Probably the most important part of it is within the new update to iOS. You have ARKit, an alternative reality system, and you have an AI chip built into the new iPhone X. These are key features which will enable Apple to build an AI and smart home ecosystem, which is very very powerful, very strong and most importantly, very unique to Apple.

"No other handset manufacturer at the moment has any AI capabilities built in and in particular, none of the other big smartphone brands have the same sort of presence in other devices in the same strength across the home that Apple can have, that Apple can leverage to really build a strong platform based around these AI solutions," says Gleeson.

FOR MORE: Steve Jobs and Bill Gates - Inside the rivalry

Also on today's episode of Counting the Cost:

Behind 'ethnic cleansing' in Myanmar: How the jade trade, land grabs and vested interests are playing a part in what the United Nations calls "ethnic cleansing".

Over the past few weeks, nearly 400,000 people escaping violence in Myanmar's eastern state of Rakhine have streamed into Bangladesh, creating a humanitarian crisis. The UN Security Council has condemned the violence against the Rohingya people, calling it ethnic cleansing. Paul Donowitz from Global Witness looks at natural resource exploitation in Myanmar, the jade industry and explains how land grabs and vested economic interests may also be playing a part in the country's religious and ethnic tensions.



Electric car: The Frankfurt Motor Show is under way and this year electric cars are taking centre stage. Volkswagen and Daimler both announced on Monday they are heading in that direction. The scandal over Volkswagen's fake emissions tests two years ago may have helped them along, as Charlotte Bellis reports.

France labour reform: It's a showdown month in France for President Emmanuel Macron as he attempts to bring in legislation to reform the labour market. But critics say the proposed changes will wipe out hard-won protections for workers. Paul Brennan was at a demonstration in Paris.

Source: Al Jazeera