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iPhone 7 Component Costs Estimated to Start at $220
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Depends on what you're using them for. If your goal is to argue that Apple is ripping off consumers, then yes, this report is not valid support for that assertion.
If you have proven that Apple infringes your LCD Display patent, this report is useful to show that the LCD is 19% of the cost of an iPhone, and that should be a starting point for reasonable royalties.
If you are a new competitor to Cirrus Logic and you are working on developing a new audio codec and amplifier chip, it is helpful to know that these components cost Apple approximately $14, or 6% of the entire iPhone in order to set internal targets for yourself.
If you are an investor in Apple, it is useful to know where component cost increases or decreases are occurring year to year, so maybe you can hedge your investment by also investing in an alternate supplier of that component. Or so you can double-down and invest in Apple's supplier.
So these cost breakdowns tell lots of stories. Just not the one story most MR users want to tell.
Forum commenters occasionally tell me Apple makes little to no profit margin. It's totally absurd.
I hope you correct these people as they're clearly wrong.
You don't have to be on MacRumors for very long to know that Apple has a healthy profit margin.
To say they don't is absolutely silly.
and R&D costs, operating costs, payments to employees, retail stores maintenance, etc, etc, etc.,
Last year the "box contents" was estimated to be $4. this year it's $11.80.
i don't think they are saving money.
Don't forget to subtract the cost of the adaptor while you are at it.
that's what people don't understand & know
thank you for that
The people who complain about how the iPhone costs so much for so low in components costs also voted for the increase in minimum wage to $15/hour in NY without factoring that to run a business you need to put in a lot of capital, pay taxes, rent, actual cost of running said business, licensing costs, permits, advertising, designing, construction of store (physical or virtual)... but nope, let's raise the minimum wage because the employers' costs don't matter.
That's my rant.
And I'm pretty sure R&D, licensing costs, marketing, running actual stores, shipping said phone to people, paying employees to write the OS, designing the CPU, cost to source materials, packaging said phone so it doesn't arrive in pieces… those costs don't matter! Apple is ripping us off!
That's my rant.
And I'm pretty sure R&D, licensing costs, marketing, running actual stores, shipping said phone to people, paying employees to write the OS, designing the CPU, cost to source materials, packaging said phone so it doesn't arrive in pieces… those costs don't matter! Apple is ripping us off!
Yes of course, plus the hundreds of Apple stores to serve all your needs.
That's another $430 printed
Don't forget Samsung, Qualcomm and Intel. Last I checked, they didn't do pro bono fabrication for Apple. They gotta get paid.
And even the slaves at Foxconn need shelter, food, plumbing and some type of sweatshop wage.
Well said. This is just materials cost. Also, Apple is quite shrude when it comes to supply chains. With the volume that Apple does, I'd put their cost at 30% to 50% lower than listed here.
Apple spends more on R&D per product than any other company out there.
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Someone please look up how much the headphone jack in the 6s did cost and calculate what Apple saved
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Except that table is made in China. Just for example.
All the real leg work is done in California - with engineering jobs that demand the highest salaries.
it probably was cheaper to buy the jack parts than to create a specific sized plastic piece to cover the space it left lol.
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Apple pays good to the famous people like Ive so even though it spends more it doesn't mean its more R&D created than google et all which can spend less but have the same or more.
So buying the components as raw components (unassembled...etc) would cost about 1/4 of the coat of the product. On top of that you've got:
- Software development (OS and 3rd party apps)
- Marketing
- Manufacturing/assembly
- Design/engineering/testing...etc (LOTs of staff)
- Distribution costs
Apple's phone is in line (if not cheaper than) other flagship phones. They NEED to spend a lot of this money so that they don't have... I dunno... exploding batteries. That's what happens when you go cheap on engineering and testing.
I honestly don't think Apple's margin is THAT high. I reckon they charge maybe twice what it costs them to fully produce each phone. They NEED this buffer to properly support the products, research new ones and ensure the quality of the phone is fit for purpose.
If anything, I'm quite happy with the margins they are making. IMO you'll probably find that proportionately this is a pretty good mark-up compared with a lot of other products you take for granted.
Also, it's nothing like the mark-up on say a Louis Vuitton handbag. Pretty sure if you broke one down it would be something like:
- Leather... $10
- Machine sewing/thread... $0.05
- Research/design... $0.05 (no real innovation there)
- Consumer price... $20,000
Apple's not THAT bad.
Do you want to go back to the days of paying for OS updates? Without the high margins from hardware that is what apple would have to do in order to subsidize software development.
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
Haha, all you suckers paying for Apple's new campus, oh wait, crap I bought an iPhone 7 plus.
I'm just kidding though, but dang that's nuts how little it costs to build one of these. Of course you have to add R&D, overhead, manufacturing, marketing, distribution, etc etc.
all these complains about removal of 3.5mm. what if IP8 turns out to be slimmer because there were no 3.5mm. Are you gonna still complain about it?
i see a lot of people saying can't charge and listen to headphone at the same time. YAH THATS A GREAT IDEA!! have electric current running directly into your body.
i see a lot of people saying can't charge and listen to headphone at the same time. YAH THATS A GREAT IDEA!! have electric current running directly into your body.
Bring on the complaints that don't get that a product isn't the sum of its parts alone.
Your car is only about $8-10k worth of parts.
The things we buy also include the cost of development, marketing, packaging, sales materials, paying all the sales people, paying the janitor at the company they're made, and a million other costs involved in developing.
Your car is only about $8-10k worth of parts.
The things we buy also include the cost of development, marketing, packaging, sales materials, paying all the sales people, paying the janitor at the company they're made, and a million other costs involved in developing.
For some thing iSupply may be accurate. But $26 for the A10? That's not available at any price retail, and that doesn't count the engineering time and effort. Heck, it's unclear how they even got that number.
As an experiment, try sourcing 15 million of those panels and see if you can get them at any price. Good luck with that.
As an experiment, try sourcing 15 million of those panels and see if you can get them at any price. Good luck with that.