iPhone 7 Cost
According to a new report, Apple’s iPhone 7 cost has risen when compared to last year’s iPhone 6s. The iPhone 7 cost may be more than previous devices to build but it is still being sold to the consumer at the same price. The iPhone still maintains a good profit for the company on each device sold.
iPhone 7 Breakdown
IHS Markit pulled apart the 32Gb 4.7inch iPhone 7 into a list of components. These components add up to a total cost of $220.80 to the manufacture. The breakdown is as follows: $215.80 for direct material costs, $5.00 for conversion costs (Inclusive of assembly, insertion, and testing). The most expensive component is the display along with the touch-screen module. Which costs a hefty $43.00 per unit.
The A10 Fusion processor which has been rumored to break benchmark standards costs about $26.90 for every chip integrated. The A10 is a 64-bit ARM-based CPU with a 16nm hexacore which makes it the beefiest of any processor seen in an Apple device so far.
The iPhone 7 is sold to the consumer for $649 which may seem like a very large margin of profit per device. It should be noted that it does not take into account Apple’s expenditure in designing and developing each unit.
Apart from the cost associated with manufacturing each iPhone, Apple also has to face expenditures when it comes to shipping. In addition, paying local taxes, marketing, and advertisement as well as the cost of packaging. The manufacturing cost also does not take into account any accessories. These include the new EarPods, Lightning cable, wall charger, and adapters which seek to enhance the experience. Finally, one cannot forget the massive amount of investment involved in research and development that goes toward these products.
We are yet to see information about the manufacturing costs of the larger 5.5-inch iPhone 7 Plus. There are no definitive breakdowns available for the manufacturing cost of the larger 5.5 inch iPhone 7 plus as of yet. However, taking these costs into consideration, it seems unlikely that Apple will be facing any financial struggles soon. It is already largely sold out worldwide showing how much faith the consumer market puts in the end quality of the product.