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Long live profit margins: Apple iPhone 6 production costs start at $200

While Samsung is struggling (and ultimately failing) to keep up with the stellar financial results posted the last few years, Apple continues to crank up not only total iPhone sales numbers, but profit margins on every handheld sold too.

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The new iPhones are huge, their latest high-profile commercials made that pretty clear, and in every single way, they’re better than the uber-hyped but somewhat underwhelming predecessors. The A8 chips are faster, the profiles are slimmer, security, health tracking, camera capabilities, everything’s improved.

It seems only logical therefore for Cupertino to charge a premium, especially as far as the “huge” 5.5-inch iPhone 6 Plus is concerned. Clearly, they’re now spending more money on various components, starting with the always costly displays.

Or are they? Are they really? Not according to IHS. Don’t get us wrong, the so-called bill of materials is pricier for the 6 Plus. Just not so pricey to warrant the $100 gap between it and last year’s 5s or the 2014 standard iPhone 6.

It’s apparently costing Apple an extra $16 to produce the 6 Plus, parts and labor included, bringing the grand total to merely $216. That’s for the variant packing 16 GB of internal storage space, which Apple sells at $749.

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Meanwhile, the highest-end model, equipped with 128 GB memory, has a BOM worth exactly $263 and a recommended retail price tag of $949. Anyone want to take the time to gauge the exact profit margins? Personally, I’m afraid I’ll faint.

And sure, these are simple estimations, based on early teardowns and examinations, plus they don’t account for possibly the most expensive pre-release stage: research and development.

But there’s nothing to better put Apple’s numbers into perspective than Samsung manufacturing costs for recent flagships. Obviously, those are not in for the yet-to-be-launched Galaxy Note 4, but the Note 3’s BOM is approximated at $232, and S5’s at around $256.

Needless to point out both devices are “huger” than the iPhone 6, and can be purchased for less, even though Apple’s 4.7 incher costs $200 to make. Still convinced iGear is the way to go? Perhaps you want to reconsider.

Source: Recode

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