Teardown Shows Apple’s iPhone 6 Cost at Least $200 to Build

In this world of transparency it is hard to keep anything a secret and what once was a very confidential matter is now merely a public discussion. The teardown of the iPhone 6 and its analysis has brought us to the conclusion that it took 200 to $247 in parts and labor to build an iPhone 6. For the larger iPhone 6 Plus on the other hand, the costs begin at $216 for the starting model and go as high as $263 for the 128 gigabyte model. These estimated costs taken from the teardown analysis come from the research firm HIS and the findings have been shared with Re/code and CNBC. The report includes cost of labor associated with assembly as between $4 and $4.50 for each device.

If we compare these costs with the selling price, there seems to be a ton of a difference. The iPhone 6 phones are currently selling between $649 and $849 without a contract and the larger iPhone 6 Plus phones are available for $749 and $949 without a contract. There is an extra charge of around $100 to $200 more for iPhone models with higher memory capacity which is too high compared with the costs to Apple for this which is about $47 more for the 128GB versions than for the 16GB versions.

Andrew Rassweiler, the IHS analyst who supervised the teardown says “They seem to be configured and priced to encourage you to buy the models with the higher memory.” According to his estimates, Apple is paying a price of about 42 cents per gigabyte on the flash memory, which is supplied by numerous companies, including Micron and SK Hynix.

The price margins seem to be following the trend of the previous iPhones but for obvious reasons they are higher than the previous models. From what we have from the teardown of the iPhone 5 and iPhone 5 from last year, we can see that the gross margins were about 69 percent and up to 68 percent for the low priced iPhone 5c. And if we go further back we see that the 2007 iPhone had a 55 percent margin.

The most expensive component on the phone right now is the display and touchscreen. LG Display and Japan Display have provided the displays which cost $45 on the iPhone 6 and $52.50 on the iPhone 6 Plus.

source: recode