iPhone SE Costs $160 to Build According to Components Teardown

According to a teardown analysis of Apple’s new 4-inch iPhone SE by research firm IHS, it costs Apple approximately $160 to build and assemble the 16GB version of the device which it is currently selling for $399 contract free, Re/Code is reporting. The firm tore down a 16GB iPhone SE in order to assess the approximate cost of the components used and also to determine the identity of suppliers.

iPhone sE teardwon

Analyst Andrew Rastweiler, who also supervised the teardown, revealed that the cost rises to about $170 for the 64GB version, which sells for $499 without a contract. He also said that the price of 16GB version is specifically targeted at encouraging buyers to opt for the 64GB version instead, when making their buying decision. Rassweiler said that the iPhone SE contains parts that have been used in three other iPhone models as well.

“The potential profit margin on the 16-gig phone is lower than it is on the 64-gig version,” he said. “Apple is selling the phone with the higher storage for $100 more but only about $10 in additional cost.”

While externally it looks very much like the iPhone 5s, which was Apple’s primary phone starting in mid-2013, it contains the same chips for connecting to cellular networks as the iPhone 6 and the same Apple A9 processor as the iPhone 6s. Chipmaker Qualcomm supplied the cellular chips, adding $15 in cost. Apple designed the A9 processor which added $22 to the final bill for parts. The chip is built by two companies: South Korea’s Samsung and Taiwan Semiconductor Manufacturing Corp.

IHS also highlighted that Apple’s decision to opt for a prior generation’s display technology for the iPhone SE reflects the company’s low-risk strategy, in case the device does not succeed in the market as expected.

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  • Tim

    So now we know why they made it; the insane margins!

  • definingsound

    Incorrect. Many of the prior iPhone’s had BOM’s closer to $100. A BOM of $160 is probably the highest of any 4″ device yet created in Cupertino.

  • mickey

    BOM? you mean Bomb?

  • Brad Fortin

    Oh, IHS, formerly iSuppli, the most reliable estimator of part costs. I would totally trust those numbers. /s

  • definingsound

    No, I mean Bill Of Materials, troll.

  • definingsound

    I’d say we all know that the 64GB version has a materials cost of $10 more than the 16GB version. How much is a 64MB flash memory card? Around USD$19.

  • definingsound

    USD$399 for the SE, which is about CAD$525. Yet Apple sells the SE for CAD$579. Someone needs to tell Apple about NAFTA, there’s no reason for the +CAD$54 cost that I know of.

  • Brad Fortin

    “How much is a 64MB flash memory card? Around USD$19.”

    I think you meant 64 GB.

    You think the memory in a memory card has the same characteristics as the memory in an iPhone? The memory in an iPhone uses PCIe and NVMe instead of UFS or eMMC, and reaches up to 400 MB/s in real-world read speeds, compared to a UHS-2 microSD card’s “theoretical maximum” of 156 MB/s. The price of a UHS-2 memory card starts at $50 for 80 MB/s, 1/5th the speed of Apple’s memory. Scale the price to match Apple’s speed, add a bit of overhead for Apple’s custom memory controller, and the cost is over $100 for 64 GB, substantially more than your or IHS’ low-ball estimate.

    Thinking the memory in a memory card is the same as the memory in the iPhone is false equivalence, which leads to false assumptions.

  • definingsound

    Nvme/pcie is the bus. The memory is MLC NAND, the same technology as in an SD card. I appreciate that Apple spent the engineering time to place the NAND memory on a fast bus, but the incremental cost of a larger-capacity device is the cost of the additional NAND.

    No one is suggesting that we can buy a 64GB PCIe drive for $10. Just that the additional cost to manufacture 64GB memory instead of 16GB is $10. It’s possible that they aim for 32GB per chip, only sometimes getting a 100% working chip, and bin the majority at 16GB. The 64GB model would have 2 100% working 32GB chips in this example.