The iPhone 6s Plus’ prices starts at $749, but it only costs Apple $236 to manufacture it, says IHS after performing their usual teardown analysis (via Re/code).
After taking the latest 5.5-inch iPhone apart to take a closer look at the components and estimate their manufacturing cost, the research firm found that the most expensive component is once again the display, at $52.50. The A9 processor is the next most expensive component, at $22, while the two cameras combined cost $22.50.
To put these prices into context, the iPhone 6 Plus bill of materials (BoM) was estimated at $216 for the entry-level model. Back then, the display was estimated at $52.50 and the A8 chip at $20.
As we put those numbers side-by-side, it looks as though the new features come at a cost, although 3D Touch apparently added no extra cost. But we don’t know that for sure, since it is just an estimate of the BoM.
Also, the new 7000 Series aluminum was said to add additional cost to the iPhone, and the IHS estimate corroborates that: The new model costs $20 more to manufacture than last year’s model. By the way, the research firm had no time to conduct a similar analysis of the iPhone 6, but they estimate the total BoM to be $211.50.
The analysis has its limitations, though: Besides being just an estimate, it doesn’t take into account a wide array of other costs such as shipping, warehousing, R&D, and marketing.
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That’s a tidy little profit for Apple. Greedy bastards.
Taken from Macrumors, this should be highlighted more in these things.
“Such estimates do not take into account an array of costs, including
research and development, software, and licensing costs, making profit
margins appear much larger than they actually are. And given the
proprietary nature of many of the components, cost estimates can be
rough. The estimates can, however, be somewhat useful in comparing
differences between generations to get a general idea of the potential
cost impact of hardware changes.”
Beat me to the R&D comment. Not every idea pans out (sapphire glass ring a bell?) and some ideas take years to get to a point where it’s economically viable to use. Apple is not like Samsung where they tear apart their competitors product, figure out how it works, make a small change, then add it to their next release. Costs to be a leader and they deserve whatever mark up they want. If you can’t afford it, buy a knockoff in a few months.
As Istvan emphasized at the end too: Besides being just an estimate, it doesn’t take into account a wide array of other costs such as shipping, warehousing, R&D, and marketing.
I get your point Gary but why is an iPhone 6s + almost $600 on a 2yr contract (that’s with discounts) but I can get an Galaxy 6 edge for $250 with no discounts & if I used my discounts I would get the Galaxy for free? Samsung must be taking a loss on the phone I suppose.
Samsung’s prices at launch were on par with the iPhone 6 last year on contract. They are just willing to drop prices way more dramatically versus Apple. Plus, they probably have warehouses of stock sitting around so it’s best they push it hard to carriers.
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