Liao Shumin

(Yicai Global) Nov. 8 -- The materials used to make the new iPhone X costs only USD370.25, the most expensive of the iPhone's series, but it is still considerably less than its retail sale price of USD999, claimed a report released by IHS Markit, a market research firm.

By contrast, the cost of iPhone 8 is USD255.16, and that of iPhone 7 is USD237.94. The two of IPhone X's features push up its production costs: improved screen and face-recognition technology, said Wayne Lam, an analyst at IHS Markit.

iPhone X uses a 5.8-inch display, with the highest pixel density and contrast compared with the previous iPhone handsets. It costs USD110, much higher than iPhone 8’s display cost of USD41.70 and iPhone 7 display which costs USD51.90. The iPhone X screen is currently only produced by Samsung, thus restricting Apple's procurement options.

This also explains why Samsung Galaxy S8's production costs amounted to USD302, with retail price of USD702, IHS said.

Moreover, Apple replaces fingerprint recognition technology with face-recognition technology on iPhone X. Lam says this technology requires special components and is more complex to assemble. It alone costs USD16.70, three times higher than fingerprint identification technology used by old iPhones.

Overall, IHS estimates that iPhone X has a gross margin of 46 percent, and after deducting production and other costs, it earns nearly USD460 per handset