Become a MacRumors Supporter for $25/year with no ads, private forums, and more!

iPhone 7 Component Costs Estimated to Start at $220

MacRumors

macrumors bot
Original poster
Apr 12, 2001
50,512
11,891



iPhone 7 component costs are estimated to start at $219.80, which is $36.89 higher than iPhone 6s, according to a preliminary teardown [Excel] of a 32GB model by IHS Markit.

The display remains the most expensive component, costing an estimated $43, followed by an Intel modem and other baseband chips worth an estimated total of $33.90.

Apple's quad-core A10 Fusion chip is the third most expensive item on the bill of materials, costing an estimated $26.90. Meanwhile, the larger 1,920 mAh battery is said to cost just $2.50.

The larger rear-facing iSight camera and improved 7-megapixel front-facing FaceTime camera cost a combined $19.90, according to IHS Markit. Electromechanical components, including the Taptic Engine, antennas, connectors, microphones, and stereo speakers, cost an estimated $16.70 combined.

iPhone 7's 2GB of RAM supplied by Samsung, and 32GB of flash storage supplied by SK Hynix, are estimated to cost a combined $16.40. An audio codec and audio amplifier supplied by Cirrus Logic, an NFC controller supplied by NXP, a Bosch Sensortec-made barometer, along with an accelerometer, gyroscope, Touch ID, proximity sensor, and other sensors, cost an estimated $14 altogether.

The accessories included in the iPhone 7 box, including a Lightning-to-USB cable, Lightning-to-3.5mm audio adapter, EarPods with a Lightning connector, and 5W USB power adapter cost an estimated $11.80 combined.

IHS raises Apple's total cost to manufacture the iPhone 7 to $224.80 after adding $5 in "basic manufacturing costs" related to assembly, insertion, and testing. A 32GB iPhone 7 Plus costs $649 as a point of comparison.

However, the bill of materials does not factor in costs related to, among other things, research and development, software, licensing costs, and transportation. The accuracy of the component costs is also questionable. Last year, Apple CEO Tim Cook said he has never seen a cost breakdown that is "anywhere close to being accurate," adding that they are generally "much different than the reality."

At least in comparison to IHS estimates for previous iPhones, the iPhone 7's bill of materials is seemingly costlier than the iPhone 6, iPhone 5s, and iPhone 5, each estimated to start at $200, and the iPhone SE at $160.

Article Link: iPhone 7 Component Costs Estimated to Start at $220
 

Small White Car

macrumors G4
Aug 29, 2006
10,925
1,235
Washington DC
I know people moan about how these prices aren't accurate don't reflect other costs, but I find the year-to-year comparisons to be quite informative.

It doesn't matter what the actual numbers are, it still shows that Apple is striving to squeeze more into these phones than ever before at the expense of their margins.

And that's interesting info.
 

LordVic

macrumors 603
Sep 7, 2011
5,561
12,091
GREEDY APPLE!!!!!

now that that's out of the system:

we're about to get inundated wiht hundreds of post who somehow think that this in any ways is reflective of the price we pay and that we're all being "ripped off"

you cannot ever equate raw hardware costs with retail pricing. Hardware costs are only a portion of the total costs that go into each device.

the fact that the iPhone 7 actually comes with industry standard hardware finally (2gb ram, and the 32gb base storage) and is clearly costing Apple more to produce from a hardware standpoint, it's clear that Apple is lowering margins on iPhone sales, which is kind of the opposite of "greedy"
 

gsmornot

macrumors 68040
Sep 29, 2014
3,290
2,930
The material for a nice table might run about $500 but once you add the labor to build and finish you could be looking at a $1500 table more or less. Just for example.
 

frifra

macrumors 6502a
Nov 29, 2008
782
469
Someone please look up how much the headphone jack in the 6s did cost and calculate what Apple saved :D.
[doublepost=1474405106][/doublepost]
The material for a nice table might run about $500 but once you add the labor to build and finish you could be looking at a $1500 table more or less. Just for example.
Except that table is made in China. Just for example.
 

ftaok

macrumors 603
Jan 23, 2002
6,225
1,253
East Coast
These cost breakdowns are always so irrelevant. They don't tell much of a story at all.

So all of those parts that Apple buys, like the Intel modem for $33.90, doesn't cost Intel that much to make. So let's pull a number of of the air and say that it costs Intel $13.24 for the modem. Then whoever is supplying the stuff that Intel has to buy to make the modem isn't selling at cost either.

Eventually, it's all free since the air, water, sand, etc to make all of the stuff is available at your local beach. Apple so greedy!

I cringe every September when this post comes out to imply that the iPhone costs $200 to make.
 

Ubele

macrumors 6502a
Mar 20, 2008
675
108
Before the inevitable flood starts ...

Post:
Greedy Apple! Their markups are obscene!! A 10% profit should be enough for anyone, so the iPhone 7 shouldn't cost more than $250!!! I am so done with Apple!!!! I'm jumping ship for Android!!!!!

Counter-post:
You obviously know nothing about business. You're not just paying for parts -- you're also paying for R&D, marketing, production, distribution, etc. Enjoy your $250 Android phone (assuming you can find one). <rolls eyes>
 

frifra

macrumors 6502a
Nov 29, 2008
782
469
These cost breakdowns are always so irrelevant. They don't tell much of a story at all.

So all of those parts that Apple buys, like the Intel modem for $33.90, doesn't cost Intel that much to make. So let's pull a number of of the air and say that it costs Intel $13.24 for the modem. Then whoever is supplying the stuff that Intel has to buy to make the modem isn't selling at cost either.

Eventually, it's all free since the air, water, sand, etc to make all of the stuff is available at your local beach. Apple so greedy!

I cringe every September when this post comes out to imply that the iPhone costs $200 to make.
Ohh, so does this mean the costs really reflect the cost of a "single" iphone, meaning no discounts applied for buying thousands of chips etc.?
 
  • Like
Reactions: pentrix2

danakin

macrumors regular
Dec 6, 2012
185
232
Toronto
Before people lose their spit over how much profit the Cupertonians rake in per device, stop to consider costs for:
  • Research and Development
  • Marketing
  • Shipping
  • Taxes
  • Legal
  • Regulatory compliance
  • Facilities (leases and sundry expenses)
  • Salaries and benefits
  • Warehousing
  • Product testing
  • Event planning and management
  • Internal and Retail training
I'm sure there are others but those are at the top of my head.
Also if customers and/or suckers (depends on your perspective) choose to dole what what they're asking for, then keep charging what the market will bear. Capitalism folks!
 

2457282

Suspended
Dec 6, 2012
3,327
3,014
The cost estimates does not include OS or Software.
It does not include marketing and other expenses.
It does not include taxes, tariffs, shipping.
It does not include profit and investor return.
It does not include R&D.

When you do, I believe that Apple states gross margins around 40% putting the per phone closer to $400.
 
Register on MacRumors! This sidebar will go away, and you'll see fewer ads.