Apple’s iPhone 6s Plus Costs an Estimated $236 to Make — $749 to Purchase
IHS
It costs Apple an estimated $236 to make and assemble its new iPhone 6s Plus, roughly one-third the $749 retail price of the smartphone, according to a teardown analysis by IHS Technology.
The research firm pulled apart Apple’s newest device to get a closer look at its components and analyze the likely cost of materials and manufacturing, drawing from its knowledge of the electronic component industry.
Though IHS did not have time to conduct a similar teardown of the iPhone 6s, it estimates the cost of materials to be $211.50 — roughly $20 less than the bigger iPhone 6s Plus.
IHS Senior Research Director Andrew Rassweiler said the teardown analysis has limitations, because it doesn’t take into account myriad other costs — from shipping and warehousing, to research and development and marketing. Still, it provides insight into what is likely the largest single cost associated with the iPhone 6s — and signals the company’s priorities.
For example, the latest iPhone 6s and 6s Plus are sturdier than their predecessors, featuring a more robust 7000 series aluminum enclosure, a more shatter-resistant Gorilla Glass 4 cover and gaskets that would appear to make the device more water-resistant (so it might survive a toilet or tub drop).
These upgrades suggest Apple is hardening the iPhone, so it will maintain its value longer — possibly in anticipation of the growing lease deals for smartphones that would create a robust secondary market for used devices. Apple for the first time offered a financing program that allows consumers to pay a fixed, no-interest monthly fee for a new iPhone, which they can trade in a year later for the next-generation device.
“They’re trying to make it tougher and longer-lasting to support this financing program,” said Rassweiler.
Apple is incorporating radio frequency components, including the wireless transmitting and receiving chip from Qualcomm, that allow for the iPhone 6s and 6s Plus to be used by a variety of global carriers. This way Apple can quickly roll out the device worldwide without making dedicated hardware for each carrier.
“It’s so much harder to manage inventory when it’s carrier specific,” Rassweiler said.
Rassweiler said Apple’s decision to offer an enhanced, 12-megapixel camera serves two purposes — it differentiates the “s” generation of iPhones from last year’s model, with its 8-megapixel camera. But the larger images also push consumers to buy smartphones with more memory — and that’s pure profit for Apple.
IHS estimates that flash memory is incredibly cheap — about 35 cents a gigabyte. So coaxing consumers to upgrade from, say, a smartphone with 16 gigabytes of memory to 64 gigs costs Apple about $17 more in component costs. But at retail, consumers pay an additional $100 for the extra storage — a tidy windfall.
Other details of note: Apple spent about $52.50 on the touch-sensitive displays that are at the heart of the iPhone 6s and 6s Plus’ 3D Touch feature, which allows users to quickly perform common tasks by applying different pressure to the screen. IHS believes Apple may have added a third layer to its screens to read these changes in pressure, which, together with the electronics to support this feature, adds about $10 to the cost of of the screens.
The iPhone 6s and 6s Plus’ new A9 processor cost roughly $22 — though there’s evidence that this latest generation of microprocessor has two suppliers, because of differences in fabrication.
Apple declined comment.
Here’s IHS’ cost breakdown:
The research firm pulled apart Apple’s newest device to get a closer look at its components and analyze the likely cost of materials and manufacturing, drawing from its knowledge of the electronic component industry.
Though IHS did not have time to conduct a similar teardown of the iPhone 6s, it estimates the cost of materials to be $211.50 — roughly $20 less than the bigger iPhone 6s Plus.
IHS Senior Research Director Andrew Rassweiler said the teardown analysis has limitations, because it doesn’t take into account myriad other costs — from shipping and warehousing, to research and development and marketing. Still, it provides insight into what is likely the largest single cost associated with the iPhone 6s — and signals the company’s priorities.
For example, the latest iPhone 6s and 6s Plus are sturdier than their predecessors, featuring a more robust 7000 series aluminum enclosure, a more shatter-resistant Gorilla Glass 4 cover and gaskets that would appear to make the device more water-resistant (so it might survive a toilet or tub drop).
These upgrades suggest Apple is hardening the iPhone, so it will maintain its value longer — possibly in anticipation of the growing lease deals for smartphones that would create a robust secondary market for used devices. Apple for the first time offered a financing program that allows consumers to pay a fixed, no-interest monthly fee for a new iPhone, which they can trade in a year later for the next-generation device.
“They’re trying to make it tougher and longer-lasting to support this financing program,” said Rassweiler.
Apple is incorporating radio frequency components, including the wireless transmitting and receiving chip from Qualcomm, that allow for the iPhone 6s and 6s Plus to be used by a variety of global carriers. This way Apple can quickly roll out the device worldwide without making dedicated hardware for each carrier.
“It’s so much harder to manage inventory when it’s carrier specific,” Rassweiler said.
Rassweiler said Apple’s decision to offer an enhanced, 12-megapixel camera serves two purposes — it differentiates the “s” generation of iPhones from last year’s model, with its 8-megapixel camera. But the larger images also push consumers to buy smartphones with more memory — and that’s pure profit for Apple.
IHS estimates that flash memory is incredibly cheap — about 35 cents a gigabyte. So coaxing consumers to upgrade from, say, a smartphone with 16 gigabytes of memory to 64 gigs costs Apple about $17 more in component costs. But at retail, consumers pay an additional $100 for the extra storage — a tidy windfall.
Other details of note: Apple spent about $52.50 on the touch-sensitive displays that are at the heart of the iPhone 6s and 6s Plus’ 3D Touch feature, which allows users to quickly perform common tasks by applying different pressure to the screen. IHS believes Apple may have added a third layer to its screens to read these changes in pressure, which, together with the electronics to support this feature, adds about $10 to the cost of of the screens.
The iPhone 6s and 6s Plus’ new A9 processor cost roughly $22 — though there’s evidence that this latest generation of microprocessor has two suppliers, because of differences in fabrication.
Apple declined comment.
Here’s IHS’ cost breakdown:
IHS Technology
Source: Recode
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