Why are iPhones So Expensive? Plus, What the Newly-Released iPhones Actually Cost

Apple just released three new iPhones. And that include a new “budget-friendly” option as well: The iPhone XR. But with a staggering cost of $799, it’s hard to believe that’s the low-end of the iPhone spectrum. What makes these phones so expensive — is it their advanced technology, or does Apple know people will spend whatever they need to in order to get their hands on the next best thing? We did some digging to find out.


Should we ask ourselves why iPhones are so expensive, or why we’re willing to pay that much to have one? | Justin Sullivan/Getty Images

The lowest iPhone on the market right now is the iPhone 7 — for $449

The lowest you’ll pay for a brand new iPhone these days is $449. It’s the iPhone 7, and it’s the oldest model available. But when the iPhone 7 was released, it was $649. So why the $200 drop through the years?

The clearest answer is that it’s simply outdated. The software isn’t as modernized as what you’d find in these newest models, and it doesn’t have all the perks (think: Face recognition instead of a password) that the newer phones do. As a result, it costs less to make, which means the company can sell it for less money. But if it was $649 to start and is now $449, does that mean Apple was ripping us off in the beginning?

Essentially, yes, but some would argue it’s for good reason. Apple designs their own software, which is more intensive than, say, a phone simply running on Google’s Android software. As a result, Apple phones are in their own unique class of mobile device. Plus, the actual metals used in creating the phone are higher end than any other smartphone.

Creating a higher-quality phone naturally would increase the cost of it. But the fact that Apple can market a phone for $449 and still make a profit shows that they were clearly upping the price because they knew people would pay. And it’s actually a smart idea.

Apple’s most expensive iPhone starts at $1,099

In early September 2018, Apple unveiled three new iPhones: the XR, the XS, and the XS Max. The XR is the most “budget-friendly” option with a starting cost of $799. The XS is essentially an upgraded iPhone X (which dropped the price of the original iPhone X by $200), which starts at $999. But it’s the XS Max that really surprised us with its massive $1,099 price tag.

The company said the camera on the new XS and XS Max is the best it’s ever been (which, of course, is the case with every new phone they release). The camera has added features, such as an improved HDR mode and a new portrait mode setting. But still, that alone shouldn’t drive the cost up so much.

The XS Max does have a 6.5-inch screen, which is a full inch larger than the 8-plus, and its design goes edge-to-edge, the same way the iPhone X does. The size and camera are both what makes it so much more expensive than its counterparts. But the processors in the XS and the XS Max are exactly the same. Normally, the larger phones have different processors.

So, is the iPhone a rip off?

To call the iPhone a rip off actually depends on your own personal opinion. For some, a larger screen, better camera, and holding the most modern piece of technology in your hand doesn’t sound like a rip off at all — it sounds like something entirely worth its price point. But to others, it’s just a glorified telephone that’s completely not worth the money Apple wants you to pay. The truth is, people are willing to pay more to have the highest quality device. In today’s world, it’s not about what is efficient — it’s about what makes you look good and what helps you keep up with friends and coworkers. A recent survey found that 28 million people would actually go into debt in order to have the newest iPhone in their pocket.

The iPhone is so expensive because, yes, it has some amazing features — face recognition used to be one of those things you could only see in the labs of sci-fi movies — but also because it can be. We keep drinking the Kool-Aid and purchasing phones far beyond our budget simply to have the latest and greatest. And what company wouldn’t capitalize on that?

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