Apple's iPhone 7 more expensive to make

Including $5 in basic manufacturing costs, total cost to manufacture the iPhone 7 mobile rises to $224.80


Reuters September 21, 2016
Apple Senior Vice President of Worldwide Marketing Phil Schiller speaks on stage during a media event at Bill Graham Civic Auditorium in San Francisco, California on September 07, 2016. PHOTO: AFP

Apple is spending more to manufacture its iPhone 7 smartphone than predecessor iPhone 6S due to features such as a bigger battery and larger storage capacity, according to a teardown by IHS Markit Ltd .

Including $5 in basic manufacturing costs, total cost to manufacture the iPhone 7 mobile rises to $224.80, $36.89 higher than the business research provider's estimates for the iPhone 6S. Apple retails an unsubsidized 32GB iPhone 7 at $649.

Apple’s jet black iPhone 7 is its cheapest trick yet

The company unveiled the iPhone 7 with high-resolution cameras and no headphone jack at its annual launch on Sept 7. IHS Markit also said on Tuesday the iPhone 7's Bill Of Materials, a financial estimate of the raw materials used, was "in line" with flagship smartphones made by rival Samsung Electronics but Apple ekes out better margins.

"All other things being equal, Apple still makes more margin from hardware than Samsung, but materials costs are higher than in the past," said Andrew Rassweiler, senior director of cost benchmarking services at IHS Markit. IHS Markit has not yet performed a teardown analysis on the larger iPhone 7 Plus.

Supplies of Apple's iPhone 7 Plus have been exhausted in all shades, and the smaller iPhone 7 has also sold out in the new jet black color, the company said last week.

iPhone 7 vs Samsung’s Galaxy Note 7: Which is faster?

Yet, in some markets, such as China, interest in the new phone has been muted, as cheaper local brands amp up their design and marketing.

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