Price controls never work. The problem here is vertical integration. If you had one company making logic boards, another company making operating systems, then the OS vendor has no reason to lock your device to using some third party vendor's logic boards. The logic board vendor has no reason to lock your device to using some third party vendor's screens. So all the parts are available independently because they're all made by different companies -- and each is a fungible product that can be supplied by multiple vendors.
The problem with price controls is that you're fixing one variable in an arbitrarily complicated transaction, and the people fixing the price are fallible.
So then one of two things happens. If you can transact around the price control, that happens. So Apple signs a contract with Foxconn to pay them a billion dollars and give them a pile of industrial waste in exchange for a pile of new parts. The industrial waste has negative value and Apple wants to get rid of it, but they claim it was worth another billion dollars, so now their "cost" for parts is three times as high because they're de facto including the cost of paying Foxconn to dispose of some industrial waste and then claiming the benefit as a cost.
If you try to prohibit that, first of all it hardly ever works because transfer pricing is a pickle, but to the extent that it does, you now have perverse incentives and inefficiencies. Apple used to get away with charging $100 even though their cost is $10, but now that means they can only charge $12 and make $2 since that's 20% of their cost. Unless they can raise their cost by overpaying vendors for equipment or hiring a bunch of people to dig holes and fill them back in. If they pay $10 for that then their cost is $20 and they can charge $24 and make $4. Making $4 is better than $2. But the customer will pay up to $100 if they have to, and if Apple raises their cost to $80+ then they can still charge $100 and make almost $20. "Cost plus" is a massive incentive to be inefficient.
So now you want to pick an amount instead of a percentage. But now if you guess to low you get shortages, and even if the price you set is alright today, it might not be tomorrow.
They have a long history of creating shortages or long queues wherever they've been tried. The only way to bring down prices is to remove barriers to supply, such as excessive regulation, and to encourage investment.
Forty Centuries of Wage and Price Controls: How Not to Fight Inflation [0] tracks the history of wage & price controls from Hammurabi's Babylon, Diocletian's Rome, Ancient Egypt, and down to modern-day examples. The book has dozens (if I remember correctly) of examples of price controls never working, explained carefully in detail.
It's an extremely interesting and carefully argued book with a lot of objective evidence.
My comment isn't directly related to the Apple situation but to the failed history of price controls.
Prices are a representation of supply relative to demand, or demand relative to supply, or prices are a function of supply and demand, or prices are where supply and demand curves intersect.
Limiting price movements almost never places it such that the price is where the supply and demand curves meet, especially since supply and demand are constantly changing. It is simply statistically impossible to guess where they will be in the future.
Therefore, limiting prices will always result in undersupply/oversupply or excess demand / lack of demand.
The robust way to influence prices is to change supply and demand itself, and use the price movements as a signal of what you need to do (increase/decrease supply, and/or increase/decrease demand).
Perfectly competitive markets are required for the lowest sustainable prices, but prices being a function of supply and demand is always the case regardless of how many buyers and sellers there are.
>There might be enough surplus so that the effect of price controls on supply would be minimal
"Might" being the operative word. Other things that might happen is sustainable businesses get driven out of business, misallocation of resources due to erroneous price signals hampering future investment in that field, etc.
The error free solution to achieving lower prices is to increase supply and decrease demand, which are many times politically unachievable due to them requiring sacrifices (higher taxes, lower consumption, etc).
> but prices being a function of supply and demand is always the case regardless of how many buyers and sellers there are.
Well technically.. but if we're talking about certain inelastic markets a minimal adjustment in supply can result in a significant increase in price (well it's the other way around to be fair).
Monopolies and oligopolies do and did exist. If the government can increase supply by finding ways to increase competition that's great. If that fails price controls are a less optimal solution, sure. But they can still work perfectly fine in some cases (as long as the producer is allowed to keep some surplus there is not financial reason to reduce supply). In non-temporary cases were it would be justifiable in my opinion:
"sustainable businesses get driven out of business, misallocation of resources due to erroneous price signals hampering future investment in that field, etc."
are not actual issues because none of that is happening anyway, the producer has no incentives to invest anything into future improvements all the funds get absorbed by it's shareholds or the administrative apparatus.
Or in some other cases it might make more sense for the government to do all that itself through targeted subsidies or concessions (.e.g. should consumers be charged fair market prices for public transport?)
> are not actual issues because none of that is happening anyway, the producer has no incentives to invest anything into future improvements all the funds get absorbed by it's shareholds or the administrative apparatus.
I disagree, there is huge misallocation of resources. For example, medicine, housing, transportation, etc. And as you mention, the problem is monopoly and oligopoly, which is insufficient supply of sellers.
So society can choose to fund taxpayer funded R&D for medicine that is in the public domain, or technology, or use land value taxes to disincentivize large landlords, or landlords at all.
The point of my original claim though is that price should only be used as a signal of which way society needs supply and demand to go. Another way of saying which way society needs goods and resources to be allocated. Directly controlling price will always lead to corruption and inefficiencies.
> Directly controlling price will always lead to corruption and inefficiencies.
So does allowing monopolies or oligopolies to abuse their position. I mean obviously price controls are not the perfect solution and should only be the last resort but I don't see how forcing a monopoly to share some it's surplus with consumers could have a negative outcome if the price cap is set at such a level that it would not affect actual supply.
> And as you mention, the problem is monopoly and oligopoly, which is insufficient supply of sellers.
In certain markets that's unavoidable. Should we have multiple competing power grids, train/metro tracks, water supply or sewage networks etc? Probably not since that would be very inefficient. In these situations the only reasonable option is price controls (without or without subsides) and I can't think of any other solution.
> In these situations the only reasonable option is price controls (without or without subsides) and I can't think of any other solution.
You still don't need price controls.
Suppose you have a subway system. The monopoly isn't on the cars; you could have multiple operators using the same tracks. The monopoly is on the tracks. Alright, so the tracks can be publicly owned.
They don't have to be publicly operated. They can work like this. Construction and maintaining the tracks is put out to competitive bidding. Competing train operators then bid for timeslots to use the tracks. If a line doesn't receive enough bids to pay for its maintenance, it gets shut down. If operators place bids for operating a new line (with e.g. a 10-year contract) that exceed the lowest bid received to construct it, it gets built.
The government isn't actually operating anything or setting any prices. All they do is retain ownership of the tracks and put out the provision of services to competitive bidding, so you don't need any price controls.
Yeah they can. I mean sometimes the model you're suggesting works out great. Sometime it doesen't.
> The government isn't actually operating anything or setting any prices
Which is not necessarily a good thing if your goal is to increase the numbers of passengers by making mass transports more attractive than other options instead of maximizing it's potential profits.
And there are other examples were pretty controls are clearly in the societies interest. Let's look at what happened with energy prices in Europe last summer. A spike in fossil fuel costs caused the price of electricity to go up by up to 10x. Producers using hydro, renewables, nuclear even coal had massive surpluses. I can't think of any reasons against price controls in situations such as that. As a result such markets (.e.g stationary PC market) tend to stagnate.
Yes, infrastructure where only one provider exists means society should just run it themselves like a utility. We already do this in many or most places. The military, electricity, gas, water, roads, public transit are all “sold” (or operated at cost) by the government.
> The error free solution to achieving lower prices is to increase supply and decrease demand, which are many times politically unachievable due to them requiring sacrifices (higher taxes, lower consumption, etc).
But in this case the lack of supply is due to a lack of competition, as a result of vertical integration.
Suppose you want a logic board for your PC. Well, it's not a secret what goes in it. It's got a circuit board, a processor socket, some memory slots, a network port, etc. If you have an Asus board and it goes bad or you need one with more memory slots, you can go buy another one from Asus, or you can get one from Gigabyte or ASRock or Supermicro that can be mounted in the same chassis and use the same processor, memory and storage devices.
Phones don't have to be any different. Some may argue that they can't be modular because of size and weight considerations. That's not true, companies have made modular phones. The Fairphone weighs about the same as the iPhone Pro Max, and in fact the Fairphone is marginally lighter. Shiftphone weighs 19g less than the iPhone 11.
But no one can make a logic board for an iPhone, because it uses a CPU that Apple won't license to anyone else. Even if you could make a board that fits in an iPhone chassis and could source memory chips and a baseband modem and so on, you can't get the CPU. And then iOS is tied to that CPU. That's why you can't get a replacement iPhone logic board from Gigabyte or run iOS on a Fairphone. It's not because Gigabyte doesn't know how to solder chips to a logic board or make one in the right shape to fit in the chassis, and it's definitely not because they don't want to take your money.
It's unfortunate that more innovation in the phone and laptops sectors has been driven by Apple than every other business. If you have a sector/market where everything is open and interchangeable you both can't (smaller profit margins) and don't want to (you'll only have an advantage over your competitors for a very short period) invest too much resources into innovating.
> There should be a law forcing tech companies to sell spare parts at cost + 20% markup.
That will just force Apple to integrate everything into one single part.
"In an attempt to increase reliability, we've soldered & epoxied everything into one seamless part, including the casing. Thanks to this monumentous effort, we've been able to guarantee that part replacements by 3rd party repair services will now always be successful."
Yep, and all parts that can be bough separately should be sold too (so at a chip level, not just "mainboard", "screen assembly", "case", etc.).
Same with cars and other devices... with a car, you can get in a minor crash and even without labour, you can get up to a new car price in parts very fast.
I'm pretty certain M1/2/.. would not exist in an environment like that. There would be no incentive for Apple to develop it unless they fundamentally changed their business model.
I'm pretty sure there was and still is. Nvidia, AMD, Intel, IBM, Motorola, Qualcomm, ARM and a bunch of others I don't recall designed or still design competitive products in this area. The thing they all have in common is that they want to make money from it...
And well unfortunately the general trend is the less open and more proprietary their products are they more money they make from it (or the higher is their share price) and the more money they have to (potentially) invest into future R&D. ARM which is the most open successful company in the sector is almost literally working for peanuts (relatively to their overall impact) compared to Nvidia, AMD, Qualcomm or Intel.
I'm not sure how would you solve that?
I mean if Apple invested X into designing M1/2 because they expected that they'd earn Y from that. However it turns out they have to make this design available to everyone (well maybe not for free but for a royalty comparable to what ARM gets) erasing their competitive advantage and as a result can only make 0.2Y at most? What would they do? Would they still invest X? 0.5X? 0.1*X? Not design a new chip at all and spend their money on something else? Maybe they wouldn't even have any money to spend in the first place because they wouldn't have been able to maintained massive margins by keeping their Software and HW designs proprietary over the years?
Free market also implies that companies can create and protect moats. This means companies have the freedom to NOT provide compatibility or emphasize repairability.
That's why we have regulation, where there is a mandatory 2 year warranty on electronic devices in EU. Also cars need to have dozens of systems that are not really needed to drive the car itself, but help with safety (eg, ABS brakes, etc.)
Just add a few lines to the regulations about schematics, individual spare parts to component levels, no blocking sales by manufacturers, and we're a step closer to a greener world.
The USB-C regulation should also include user-replacable batteries (or at least something that doesn't need additional parts (eg. glue) to reassemble, since the battery is guaranteed to fail with time, even if the rest of the phone survives.
There is nothing to be said for it. If Apple is obligated to just give away the M2 to competitors, they wouldn't have invested to create the M2 in the beginning.
Free market implies that a company can create any service and product they want. It's up the customer to decide if they want to pay for it or not.
This means a company like Apple does not have to provide access to its proprietary M2 SoC to anyone who asks. That makes no business sense. What's the point of investing billions to design and mass manufacture SoCs if "free market" says you must give it away?
> This means a company like Apple does not have to provide access to its proprietary M2 SoC to anyone who asks.
This also means that a disgrunted employee that knows how to build M2 SOC can leave and starts their own production. But currently goverment would send armed goons with guns, at taxpayer expense.
And US government seizes my private property, if I post to myself earbuds from China that look too much luke airpods under the pretence of 'Counterfeit goods'.
You are advocating hypocracy, free market for me but not for thee.
I am all onboard for the real free market, where government does not interfere to protect Apple at my expense.
It's anarchy that says companies can do whatever they want including create and protect moats, sign exclusivity agreements, and do all sorts of anti-competitive things. (Eg: Microsoft licensing deals in the 80's and 90's) In order to have a free market that's actually guided by an invisible hand, it must have competition. A market with monopolists is an unfree market.
It is a concept called "bundling" in antitrust where the valuable M2 is only sold in concert with a less exceptional tablet in order to be able to charge triple markup for the tablet and storage upgrades...
Unbundling is a heavily pro-consumer move and enlightened governments are pushing towards forcing companies to do it (and penalising companies for bundling, though there's far less of that in the last 20 years than there ought to be).
Why are you assuming M2 would even exist in the first place if Apple knew they had to share it with everyone?
Unless they wanted to enter the B2B market they would have no incentives to develop their own chips whatsoever and would just use whatever ARM/Qualcomm/Samsung/Intel have to offer.
> forcing companies to do it (and penalising companies for bundling
As long as they understand that this might have negative effects on innovation. Why invest significant resources into developing something new if there is a cap on how much you can benefit from that?
> but regardless it shows the invalidity of your question
I'm sorry but I really don't see how...
> See all the AI stuff that Google is giving away
I assume they were doing that because they could not monetize it directly yet and believed that by making their research publicly available they would accelerate overall development and benefit more long-term from that than if they kept it secret. Additionally that also increases their public standing, allows them to attract high level talent and deprives funding from any of your potential competitors since they have not yet monopolized any highly profitable markers and simply can't afford to compete with you. Which is great, when it can work like that's how it should work when it can.
Apple (and similar companies have) no such incentives. Apple developed their own processors to differentiate their products and to increase their sales while maintaining high margins. If they had to share their designs with everyone else why would they do that? Makes no sense. You just take whatever is available off the shelf (Intel or ARM etc.) and focus on differentiating your product some other way.
Other companies with very different business model might be able to design just as good chips or better chips, who knows if all chip designs were completely free.. It certainly would not make much sense for a company like Apple to invest into that as much as they did.
I think overall it's pretty simple, even if we assume that most companies/people want to 'do stuff for the greater good of advancing technology' (which is really not that case for every Stallman you have dozens of Larry Ellison's..). How would you fund that? It works great for certain types of software because using/contributing to OSS allows companies to decrease their costs since core components of the OS/databases/browser engines/web server/frameworks/etc. are not the things they would use to differentiate their end product. And that's great because they are able to pool resources together and come up with something much better than they would on their own. But that only works if your core product remains proprietary, if you can make money from offering additional services like consulting/customization/support or by adding an additional layers on top which provide end value to consumers (.e.g. Android, Chrome etc.).
What if your core business model is developing and selling a proprietary general purpose server/workstation operating system and you don't have a massive moat like MS (and well that's has been their business model for years anyways..)? Well tough luck.. you went bankrupt decades ago..
How would this work for companies that make CPUs/GPUs/any other high-end chips (or to be fair any hardware in general)? What incentives would they have to develop anything new if they can't keep your designs proprietary? Do stuff for the greater good of advancing technology?
Well sure why not.. With what money though? Since the market is more or less perfectly competitive everyone's margins are effectively zero. It only makes sense to invest into things which lower costs/increase productivity for your factory/distribution. How exactly could any R&D investment payoff? You want to make you chips faster/more efficient, well sure you can invest 1-5% of your total revenue into that at the cost of making your company total unattractive for investors since you'd not be making any money by doing that.
IMHO if we want to live in a world without IP communism (or something close to it) is our only real option. But we all know how that works out when it's enforced top to bottom....
The 'board' on my dishwasher went - the only solution was to get one from the grey market (and the manufacturer didn't sell them direct to consumers) for nearly £150 - I could get a new dishwasher for £200.
It felt crazy to scrap the machine for want of a part that couldn't cost more that £20 to sell me (and £5 to make?)
This sounds like a climate change problem that should receive a quick solution for the sake of the planet.
Amazon is well placed to provide distribution of these parts at reasonable rates. Maybe they can be forced into such in order to continue receiving government contracts. Assuming they wouldn't play nice.
Simply increasing fossil fuel taxes would solve this issue much more cleanly and comprehensively than targeted legislation that can easily be manipulated.
Capture more externalities of energy usage into a products' price, and people will be less able to waste money on throwaway products, and hence businesses making long lasting, repairable products will win in the market.
Of course, the problem is, people want cheaper, throwaway products so they can consume more.
I live in Canada where your suggestion is implemented at least in some capacity. The result has not been great.
I believe part of the problem is that many people simply cannot afford to pay more. If we could target both problems at once I can see this working very well.
The solution I posted does consider low income people and would have an immediate benefit to everyone except the companies that have created the problem.
We could also tax all new goods, except parts. To bring the cost incentive back to reality. Perhaps multiplied on a climate impact rating that would also be tied to repairability. So the cheapest product would definitely be the longest lasting product, which would also be cheapest to repair.
>I believe part of the problem is that many people simply cannot afford to pay more. If we could target both problems at once I can see this working very well.
Yes, you can. Give cash to everyone, and take it back via increased marginal income taxes rates (ideally an exponential tax rate function), aka wealth redistribution.
>The solution I posted does consider low income people and would have an immediate benefit to everyone except the companies that have created the problem.
The problem is in the logistics and crafting of the legislation, and then the court fights, and so on and so forth. We have seen this time and time again, and probably will, because legislation with tons of loopholes that makes people feel like they are sacrificing, but not really, is the only politically possible solution.
How long do parts have to be provided for? Which parts? What about parts that are dangerous? What is dangerous? Just goes on and on and on, and society ends up wasting even more resources.
I'm far from being a free-marketeer but when people buy an Apple thing they know what they're getting regarding repairability and they're OK with it. Someone who cares about the availablity of spare parts for a sensible price should buy Dell, (presumably) Lenovo, maybe Framework, etc.
A part of me agrees, but it does kind of feel like Apple is the trendsetter/gatekeeper for a lot of this stuff. Everyone crapped on Apple for removing the headphone jack, or making non-replaceable batteries...and then quietly started doing all that themselves.
I am super happy that companies like Framework are getting some traction, and there's a fairly high likelihood that once my current Macbook breaks that my next laptop will be a Framework, but I also feel like Framework is still kind of a niche outlier; Apple seems to be the "test the limits of what customers will tolerate" company.
I do agree about a lot of the (IMO) backward steps being Apple's fault, and I support legislation on some things - a common charging plug is good (don't care what it is, USB-C is OK) and a common replaceable battery standard would be nice too.
The headphone jack... Turns out people didn't care, or Sony phones would be a lot more popular than they are (I like them, I accept I'm not normal.)
Framework is a niche outlier, but Dell isn't and you can get service manuals and spares easily for all their business laptops. Maybe people just don't know that? (Don't touch the consumer lines, obviously - and I include XPS in that.)
Then you are a free-marketeer. Is advocating for choice in the marketplace something to be ashamed of? If people stick to Apple despite their history, they're indirectly saying that the quality of the product is so much that despite the inconveniences, they still consider Apple products a net positive.
They can deal with it if they don't want to use competing brands that are quite as good.
>There should be a law forcing tech companies to sell spare parts at cost + 20% markup.
Why stop there? Maybe force tech companies to sell their products and services at cost + 20% markup. /sarcasm
1. What happens if the company has too many spare parts and wants to sell at 0% markup? Can they do that?
2. What happens if the spare parts factory burns down in an accident? Is the company legally obligated to rebuild the factory? What are the terms for how fast must the company rebuild the factory? Does the company need a backup factory to produce spare parts?
3. How long should the company be obligated to provide spare parts? Should this duration be applied to all electronics?
Apparently Apple can’t compete with these independent repair companies either, because Apple only barely offers repair services. For iPhones they offer only three options: replace the battery, replace the screen and replace the phone.
Depends on the repair but much more of the phone is replaceable that before. Albiet not user replaceable without paying a little extra to rent the tools.
I hate to say this, but I won't fault Apple's decision to do this. If you think they're abusing their market power, vote with your wallet: stop buying Apple.
If you still choose to buy their products despite this 'abuse' then you're indirectly saying that it's a net positive for you & that you don't mind.
Not particularly easy when they're the only ones who have even the slightest bit of respect for the privacy of their users in the mobile market. The other choices that come to my mind are either:
- Normal Google Android, which is just spyware
- Android but without any GApps, which barely runs anything relevant
- Android with either MicroG / sandboxed Play Services, which AFAIK breaks Google's ToS and is at the mercy of them not breaking those
- GNU/Linux phones, which I can not in good conscience call primary daily-driver ready
- Dumb phones I guess?
Doesn't leave us with many options. At this point it's choosing the lesser of two evils.
This is probably intentional - now that they've allowed repairing of your own devices (allowed is a bit too generous, more like strong-armed into allowing). So, they do the next-best thing... make it expensive to do self-repair (via parts cost) and cheaper to offer repairs. It's win-win. They come out on top looking good ("Oh look, we're absorbing some of the cost for repairs.") and consumers lose out. The net effect is that repair shops will also find it costly to repair.
If I recall correctly, this is pretty much exactly the strategy that Louis Rossmann was calling out when Apple first started their 'repair' program. He was right.
Bottom line is we should mandate in the law that if you sell a product, you need to provide specs and schematics of all parts it consists of so that third parties can build and sell replacement parts of same spec and quality.
I'd be happy if the chip manufacturer was allowed to sell me the same chip at all. There are chips, made specifically for apple, that are far from any secret/nda stuff, since there are billions around in peoples pockets, but the manufacturer is not allowed to sell them to consumers.
Louis Rossmann mentioned this too, where he has to buy an apple powerbank, to remove one chip (charge controller?) to fix an iphone, and then throw away the rest of the powerbank, because the manufacturer is not allowed to sell him a chip worth a few cents.
I’ve never understood his crankiness on this subject: the concept of ‘right to repair’ is entirely synthetic.
Government intervention in markets is usually predicated on some kind of ‘market failure’ and I don’t see how that is the case here. There is plenty of competition in the phone market and if the option to have a phone repaired by third parties was really desired by consumers then someone would sell such a phone.
It seems more like Rossmann is angry there is not a product-market fit for his services. Something like that.
> make it expensive to do self-repair (via parts cost) and cheaper to offer repairs
If the parts can only be sourced from Apple and are expensive, third party repairs are expensive too. My perfectly useable 2017 iPad Pro got a screen broken and the third party repair service quote was equivalent to a new 2023 iPad Air (around 400€!)
I see where you're coming from, but it might be worth considering that it being your property doesn't imply that you can repair it. I bought a CPU, I own it, it's my property, and if it somehow broke, I am completely unable to repair it.
But that's immaterial, because as the article mentions, you -are- able to repair it. There's just not enough of a market for third-party repair shops, when they're competing with Apple offering the same service.
Of course it'd be nice if repairs were cheaper, who wouldn't want that? But the cost of repair doesn't define whether something is your property or not.
But Apple are trying the make sure you can’t repair things except through them, or through one of their “authorised” providers which means they are only allowed to do a few types of repairs and there’s no price competition because they have to buy all of their parts from Apple. They do part serialisation, meaning that the parts have some kind of encryption key/serial number so that they won’t work properly until Apple pairs them.
> There's just not enough of a market for third-party repair shops, when they're competing with Apple offering the same service.
There is plenty of a market for repair services. Lots of people with skills and lots of customers with broken devices. What there isn't is access to parts necessary to do the repairs. When Apple is the only source, they add the full markup they charge to do the repair themselves to the price of the part itself, which prevents anyone else from offering a lower markup.
The answer to this is to have competing suppliers of the parts, but that doesn't happen when the system is purposely designed to be non-modular so an indivisible part can only be produced by a huge conglomerate and the parts that can be replaced are DRM locked to prevent even that level of competition.
>I see where you're coming from, but it might be worth considering that it being your property doesn't imply that you can repair it. I bought a CPU, I own it, it's my property, and if it somehow broke, I am completely unable to repair it.
depends where you put a border between a part and a device. If you treat PC as a whole, CPU is just a part.
And frankly - CPU is useless by itself.
I agree, right to repair does not stipulate any upper price limit. Crying for the ability to repair an item is reasonable and justifiable, but crying for those repairs to also be cheap is straight up being greedy. Yes, it's ironic.
"God why is Apple gouging customers with high repair prices."
Apple: "Uhh… we're actually eating most of cost by making rent from device sales and shipping parts through the same chain the phones go through so if you tried to buy them retail it wou... uhh guys?"
Furiously typing, "Apple is using their monopoly power to screw over local repair shops."
Apple would say that regardless of whether it's true, and there's no way to audit Apple to confirm it, so it provides no useful information. This is just a longer version of "Apple said to trust itself".
Then why are they explicitly blocking repairs? Serialising parts so they won’t work properly until Apple approves the device/part combination, gluing in components, blocking the parts manufacturers from selling to anyone but Apple…
Except that there is a mountain of evidence that shows none of Apple's parts are nearly as expensive as the retail price.
If I remember correctly, the Iphone 13 Pro costed an estimated $570 USD build, with a retail sale cost of $1,099 USD.
Of course, the same can probably(?) be said about the phones produced by competitors such as Samsung, with the Galaxy.
Point being, Apple has always marked their garbage up by anywhere from ~150% to 200% of the actual build price. There is no reason to trust Apple's pricing for spare parts. Especially when previously, these same repair stores went by the back door to get these parts directly from the factories in China.
Build cost != cost to manufacture. They, nor anyone else, are not marking "their garbage up by anywhere from ~150% to 200% and distribute. of the actual build price." That is simply not how manufacturing works.
Every step of the supply chain has costs; labour and raw materials for example. Then there are land costs, taxes, services (power, water, machinery, et.) and distribution. Then there is R&D to account for; software needs to be developed, for instance. Their actual markup is around the 30% mark.
I did some basic research again (last comment was on the toilet) and everything I am finding says that Apple's Iphone margins are sitting at around 40%.
Either way, I can't afford one if I can't replace parts at cost.
There is almost no way anyone outside of high level Apple executives that would be privy to their estimates for margins on individual iPhones including R&D and other costs. Especially because a lot of Apple products' value proposition comes from the ecosystem of their services, including the ability to visit a retail store and talk to a W-2 employee of Apple (which sets them quite apart from basically every other electronics brand).
You can see their overall profit margin though, which they keep around 25%:
Heck, these companies could even simply use Amazon for handling the logistics of it.
Some companies like Bosch Home Appliances actually sell spare parts in their own online store at very reasonable prices - so it is doable.