The cost of the components inside the iPhone 7 adds up to $450 (£344) less than the price of the new phone, according to a teardown company.
The components within a 32GB iPhone 7 are estimated to be worth $219.80, teardown experts IHS Markit have said, with the most expensive piece within the handset being the screen at $43.
Once the $5 “basic manufacturing costs” of assembling and testing are taken into account, the total cost for Apple to produce the 32GB iPhone 7 is $224.90, IHS Markit estimates.
In the UK the iPhone 7 starts at £599. That’s £60 more than the iPhone 6s, even though the latest handset cost just $36.89 more to make, thanks to the upgraded camera, better battery and faster chips.
In the US the phone retails at $649, the same price as its predecessor.
Apple has slightly better margins on its handsets than Samsung, IHS Markit said, but the cost of production for the iPhone 7 is “in line” with Samsung’s flagship Galaxy smartphones.
“All other things being equal, Apple still makes more margin from hardware than Samsung, but materials costs are higher than in the past,” Andrew Rassweiler, senior director of cost benchmarking at IHS Markit.
The teardown price does not take into account the time and money spent on research, software and transport, among others. As a result, Apple has previously indicated that the production cost is higher than teardown estimates.
“Generally there are cost breakdowns around our products that are much different than the reality. I’ve never seen one that is anywhere close to being accurate,” said Tim Cook last year.
The iPhone 6, 5s and 5 were all estimated to cost around $200 to make, while the components in Apple’s latest 4-inch device, the iPhone SE, are worth just $160.
iPhone 7 parts and how much they cost
The display, which is the most expensive part of the iPhone 7 at $43, is closely followed by an Intel Modem and other chips that cost a total of $33.90, said IHS Markit. The new A10 Fusion chip meanwhile costs around $26.90 and the two cameras add up to $19.90.
Perhaps surprisingly, the newly expanded 1,920mAh battery is worth just $2.50, while the Lightning EarPods and charger together cost $11.80.
Source: Telegraph
