We all know the markup on iPhones is significant, but how much does it cost to actually build one? According to a new report, Apple spends roughly $200-$250 for each iPhone 6 or iPhone 6 Plus. When you remember the phone starts at $650, it sounds downright evil to charge so much, but that’s not the whole picture.
The iPhone 6 runs Apple roughly $200 for the base version, and scales up to $247 for the top-end, 128GB version, according to research firm IHS. The bigger iPhone 6 Plus starts and ends about $16 more — $216 for the base model, and $263 for the top-end memory beast.
The iPhone 6 retails for $649 for the base model, and climbs to $849 for the 128GB version. The iPhone 6 Plus is $100 more at every turn, starting at $749 and topping out at $949.
The cost for more memory to Apple? $47, when you compare the base 16GB model to the 128GB variant. The cost for more memory to you? $200, when you compare the base 16GB model to the 128GB variant.
IHS analyst Andrew Rassweiler, who oversaw the teardown/research project, said “They [Apple] seem to be configured and priced to encourage you to buy the models with the higher memory”. The margins correspond with more recent iPhone models, too.
As for where the components come from — LG or JDI make the displays, while Corning is still supplying Gorilla Glass (Gorilla Glass 3, specifically) for the iPhones. Memory comes courtesy of Micron and SK Hynix. The A8 processor is from Taiwan Semiconductor, and costs about $3 more than the A7 chipset.
We’ll keep in mind this only accounts for build-out, and doesn’t account for Apple’s efforts to distribute, market, and otherwise support the iPhone and iOS.