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Report: iPhone 6 Costs $200 To Build

Report: iPhone 6 Costs $200 To Build

by Brad MerrillSeptember 23, 2014

It’s no secret that the markup on the iPhone is significant, but how much does it actually cost to build one? According to research firm IHS, Apple spends approximately $200–$250 in parts and labor for each iPhone 6 or 6 Plus.

The iPhone 6 costs Apple about $200 for the base version, and runs up to $247 for the high-end, 128GB version. The iPhone 6 Plus is just a bit more—$216 for the base model, and $263 for the top-end version.

The iPhone 6 retails for $649 for the base model, and jumps to $849 for the 128GB version. The iPhone 6 Plus is $100 more for each version.

Apple charges $100 to $200 more for iPhone models with higher memory capacity. But the company’s cost for the additional memory is only about $47 more for the 128GB versions than for the 16GB versions.

“They seem to be configured and priced to encourage you to buy the models with the higher memory,” said Andrew Rassweiler, the analyst who supervised the teardown.

The most expensive component in both devices is the combined display and touchscreen, which comes from LG Display and Japan Display, costing $45 on the iPhone 6 and $52.50 on the iPhone 6 Plus.

Corning still supplies Apple with Gorilla Glass to protect the outer layers of the display. Rassweiler says the two new iPhones use Gorilla Glass 3, its third-generation product. There was speculation that Apple might go with sapphire for the display’s outer layer, using materials from GT Advanced Technologies. Instead, sapphire is only used to protect the main pushbutton and the primary camera.

The iPhone’s main processor is the A8, designed by Apple and manufactured by Taiwan Semiconductor Manufacturing Co. Apple had previously used Samsung as its chip manufacturer, despite the fierce patent litigation between them. Apple has since shifted some—but not all—of its production to TSMC. Rassweiler says TSMC is now producing about 60 percent of the chips for Apple, while Samsung is still manufacturing about 40 percent.

IHS estimates that the A8 processor and an attached co-processor cost a combined $20.

The iPhone 6 and 6 Plus come with near field communications chips for Apple Pay. The main NFC chip comes from NXP Semiconductors, while ams AG makes a second one, called an NFC booster, that increases the signal’s range and performance. The two chips, along with other components in the category of “user interface and sensors,” add a combined $22 to both phones, according to IHS.

Of course, this report only accounts for production, leaving out Apple’s marketing, distribution, and support efforts.

About The Author
Brad Merrill
Brad Merrill is the founder and former editor of VentureBreak.