IHS estimates iPhone 7 $649 base model costs Apple $225 to make, up 18% YoY — According to a new teardown from IHS Markit, the cost of the new device jumped about 18 percent from last year’s model. — James Martin/CNET — All that new tech crammed into the new iPhone 7 isn’t coming cheap for Apple.
The iPhone 7 costs Apple more than you think
According to a new teardown from IHS Markit, the cost to make the device jumped about 18 percent compared with last year’s model.
According to CNET, All that new tech crammed into the new iPhone 7 isn’t coming cheap for Apple.
Apple’s materials and manufacturing costs for the phone total $224.80, according to a teardown estimate by researcher IHS Markit on Tuesday. That’s up about 18 percent from the iPhone 6S, released last year.
Apple kept the base price for its newest phone the same, at $649 — nearly three times the build costs.
An Apple representative didn’t respond to a request for comment.
The rise in manufacturing and materials costs — but not the price to customers — points to a maturing phone market, where most anyone who wants a smartphone already has one. That means that Apple, Samsung and other manufacturers don’t have many places to go to find new customers. Instead they need to work harder to persuade their current users to upgrade to the newest device or try to steal customers from another manufacturer. All this heated competition should cut into Apple’s profitability; it’s already reported two straight quarters of weaker iPhone sales.