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iPhones are inexpensive to make

ToddH

ToddH

macrumors 68040
Original poster
Jul 5, 2010
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Southeast Texas
I don't know how reliable the source is, but I did read a small article on Flipboard that stated that the iPhone 6s only cost Apple $235 to manufacture. The rest of it is profit now I don't know how much the plus phone costs, but it makes you wonder why we spend so much money on these phones when they are so inexpensive to manufacture.

http://flip.it/5v5gp
 
ToddH said:
I don't know how reliable the source is, but I did read a small article on Flipboard that stated that the iPhone 6s only cost Apple $235 to manufacture. The rest of it is profit now I don't know how much the plus phone costs, but it makes you wonder why we spend so much money on these phones when they are so inexpensive to manufacture.

http://flip.it/5v5gp
Click to expand...
You misunderstood the article. There are many costs over and above the component costs.
 
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nrvna76 said:
That's component cost only. Not assembly, software, advertising, store overhead, paying Tim Cook, and probably more stuff.
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This.

2015 Apple has dumped more into R&D than they have in several years (excluding the buildup to the watch), that comes from Apple reinvesting into itself.
 
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nrvna76 said:
That's component cost only. Not assembly, software, advertising, store overhead, paying Tim Cook, and probably more stuff.
Click to expand...
Design, procurement, capital investments, tooling, planning, shipping, electricity, heating/cooling, factory building, labor...
 
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Okay obviously that's component cost only and doesn't take into account for everything listed above, but Apple's the most valuable company in the history of the planet, and they take over 90% of the profit in the smartphone industry while only having 18% of the market share, so let's not think these devices are modestly priced...
 
ToddH said:
I don't know how reliable the source is, but I did read a small article on Flipboard that stated that the iPhone 6s only cost Apple $235 to manufacture. The rest of it is profit now I don't know how much the plus phone costs, but it makes you wonder why we spend so much money on these phones when they are so inexpensive to manufacture.

http://flip.it/5v5gp
Click to expand...
You say this as of it only applies to Apple. Almost everything you buy today has a huge profit margin
 
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Water is easy to have since it's a natural resource thst doesn't even need to be produced! Why are we ever paying anything at all for anything related to water if nature gives it to is for free?
 
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JXShine said:
You say this as of it only applies to Apple. Almost everything you buy today has a huge profit margin
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So very true. The industry I work in, Millworks (doors, windows, etc) there is a huge mark up. I can see both component cost and I know what we sell our products at. There is a lot of hidden costs that don't translate when you look at just component costs that you have to consider.
 
I guess I was just mentioning this because I just didn't realize how inexpensive the actual parts were for the phone. I guess I'm not really complaining are talking about the overhead and employees and software etc. I'm just mentioning the actual cost of the materials. I just thought that the phone itself would cost more than that to manufacture
 
ToddH said:
True... That part I did NOT think of.
Click to expand...

component parts are the cheapest. Investors try to figure out profit margins with them, but they are only part of the story . Actually the smallest part in technology. Consider the millions invested in R&D and manufacturing overhead to produce a custom chip alone, let alone finding ways to mass-produce technologies like touch id (authentec) and force touch -er- 3d touch.

then you have the OS development and support, home grown compilers and IDEs, iCloud infrastructure, and so on. Its really big.
 
ToddH said:
I guess I was just mentioning this because I just didn't realize how inexpensive the actual parts were for the phone. I guess I'm not really complaining are talking about the overhead and employees and software etc. I'm just mentioning the actual cost of the materials. I just thought that the phone itself would cost more than that to manufacture
Click to expand...

From their earnings calls we know Apple's margins are about 40% on average. The margin on the 16 gig model would be lower and higher on the higher capacity phones. The 6S and 6S plus will likely be similar.
 
People saying there is much more besides the cost to manufacture are right but its just less than the cost to make the phones. Just take a look at apple profit last quarter 18 BILLION yes Billions so i'm pretty sure whatever their R&D cost is not that much per device.
 
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Put it in this perspective instead.

$235 per phone. They make a million phones and they are already 235 million dollars in the hole for just parts.

That's a lot per device. Let's say only half sell. Apple only breaks even. Assuming apple has a 50% profit margin and assuming the $235 is the total complete cost of the phone.

Correction: Assuming the total and complete cost of the phone is more than $235 each.

ToddH said:
I guess I was just mentioning this because I just didn't realize how inexpensive the actual parts were for the phone. I guess I'm not really complaining are talking about the overhead and employees and software etc. I'm just mentioning the actual cost of the materials. I just thought that the phone itself would cost more than that to manufacture
Click to expand...
 
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Why is this news? The component costs for the iPhone has always averaged around $200 since the original. I think it started out around $175 or so and now it's a bit more expensive at $235.
 
MrX8503 said:
If I gave you all the materials to build a house (except equipment) can you build it for the cost of what I paid for the materials?
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Exactly right. Every single item we buy costs more to make than the cost of the materials alone.
 
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