iFixit wasted no time in carrying out its teardowns of the iPhone 6s and 6s Plus, and now IHS has weighed in with its usual estimate of the component and assembly costs. It reckons the total cost of materials and manufacturing of the 16GB 6s Plus to be $236.
Direct Material Costs (Component Costs)
Conversion Costs (Assembly / Insertion/ Test Costs)
Total Cost (Direct Materials & Manufacturing)
Tim Cook would doubtless take issue with this estimate, as he has with others.
There are cost breakdowns around our products that are much different than the reality. I’ve never seen one that is anywhere close to being accurate.
IHS said that 3D Touch and the associated haptic engine were the most obvious new components over the previous year’s model, with an estimated $10 of additional costs, but also noted three improvements geared to making the device more robust …
The switch to the harder 7000-series aluminum (first leaked back in August) was of course already well-known, as Apple sought to avoid another bendgate – and no surprise either that Apple is using the latest Gorilla Glass 4. But IHS was also able to explain the surprisingly good water resistance of the new iPhones, noting “additional gaskets and seals.”
It speculated that Apple may want to ensure the devices have a longer life now that its annual upgrade program will generate a lot of trade-ins for the company.
The company highlighted a common complaint levelled at Apple: the $100 increments charged for each flash memory increment. IHS estimated the difference in component cost between the 16GB and 64GB versions to be around $17. The display remains the most expensive component, at around $52.50.
IHS says that it has not yet had time to analyze the smaller iPhone 6s, but given the differences between the two models, its initial estimate is a total component and assembly cost of $211.50.
In addition to Cook’s own caution, we’d make our usual observation that these estimates do not take into account any of the many other costs involved in bringing the product to market, among them R&D, marketing and distribution. This noted, you can see the IHS breakdown below.
FTC: We use income earning auto affiliate links. More.
Well and I just found out iPhone 6s and 6s Plus will be 100 EUR pricier in my country because of US Dollars getting stronger. I think it’s totally ridiculous and it should have the same price. This is so sad and I take it as very unfair people in US can get electronics much cheaper than people in EU. Because of that, I’ll probably need to stick to my 4s for some more time and I totally hate it.
1) This isn’t limited to Apple
2) CE in The States costs less
3) US prices are excluding VAT, European prices include VAT
I know it’s not Apple’s fault, it’s EU’s fault and they should do something about it. VAT is ridiculously low in US. What is it? Like 7-11%?
Do you also think it is unfair that you get wet when it rains? Why should Apple take the hit from changes in currency exchange rates?
I’m not blaming Apple. I’m blaming EU for not being able to hold their sh*t together. Our wages are not higher so why should we pay more for things we buy? EU should allow lower import fees and the prices would stay the same.
This is how a world economy works… for every single product sold across currencies. If you want to feel better, look at the price increases for Russia who’s currency has dumped 30% over the last year…
That include VAT? Maybe that’s the reason?
There is no VAT in the U.S. There is no federal taxes on goods sold to individuals. State & Local taxes are charged at the time of final sale. here in SC its 6% sales tax at the Apple Store, so a $949.00 6s Plus costs $1005.94 after taxes.
“I always laugh at these estimates. They’re completely off”
– Tim Cook, 2015
So these estimates are usually way off and contribute nothing to the discusson except supplying outrage fodder for trolls.
Still 9to5 Mac (and hundreds of other blogs) publish them, thus lending these unreliable estimates legitimacy. All driven by the desperate need for ad revenues.
Tell me again why we should be sad that this form of ‘journalism’ will shrink due to ad-blocking?
Brother did you hit the nail on the head with your post! Says it all really. Thanks for doing it.
Because this is a rumor site… why did you come here to complain about being here?
Oh, because 9to5mac is a “rumor site”, they can publish anything they want and be legit.
Apple has 115,000 employees that work to develop products like the iPhone, and these people work in order to be paid.
The costs to compensate these 115,000 employees are not reflected in this breakdown.
Then you have to add what the costs are for Apple that include the iCloud free services, warranty/support costs during the warranty period and then updating the costs of the OS and apps during the lifetime of the product. Those are costs absorbed by Apple and shouldn’t be ignored from the mfg cost of the product, and THEN you add R&D, SG&A associated to the product, which they amortize over the total amount during the lifespan of the product. You probably need to add another $100+ for each unit. Also, the only units that Apple gets the most profit from are those that are sold direct from Apple to the customer that are unlocked. I believe the others get discounted to the cell carrier and/or reseller.
I’m not sure why they do this. I don’t care how much the components in my phone cost any more than I care what the components to build my car cost.
In manufacturing you have all manner of variables which massively affect the price of production, anything from R&D to legal, logistics to wastage. No teardown team is going to know the precise costs of each component that Apple pay, since Apple clearly buy a lot of items and I’m sure get a nice discount on their insane bulk purchases.
It is frankly amazing that a company can put millions of new phones into the hands of millions of people around the world in such a short space of time. But that didn’t happen by chance.
Wow, look at all these haters in the comments…they’re acting like someone insulted their girlfriend or something…unless your iPhone IS your girlfriend…in which case, sad day…
Apple should also have included this liquid seal for the Apple Watches. Hope it will be inclued in the version 2…
It’s interesting to see the “sunk cost” of the phone: after the entire process of development and so on, the money has been sent, the venture is afoot and the die is cast. Sunk cost: this is also what it would take for a copycat to assemble something similar. With Google’s help, it would bet out at half the price in a year. Now, the holding power of a brand is months, not a decade, as it would have done in other times. But I prefer Apple’s approach. As long as I can afford it, I will be more a fan of what Apple’s done next. They’re the creativity company. You love the way their minds work or you don’t. But it’s worth the money. Design first. Now, when I’m poor, I’ll be thankful for the Google version, and I’ll appreciate them more. But right now, 3-D Touch for me! Just like Apple Pay. Yes, it was around before on Android. But what did it take for mass adoption? 1:Easy as hell for the consumer, and 2, Way more secure. If I buy an iPhone, I know the whole backstory, and it includes Jobs, Jony and fast cars with no license plates on the freeway back and forth between Apple and NeXT.
They also don’t take into account overheads. I would like IHS to estimate, cost from from factory to end user, R&D cost, Apple Store cost, Head quarters costs, VAT, lifetime iOS software development costs (about 4 updates), per phone. People usually complain about iPhones being expensive, actually with Samsung S6/Note 5 costing about same price as iPhone, in real terms it’s actually more expensive because of open source software that is paid for by ads (Google).
Why is it so important for consumers to know the price of each component for Apple products? I never see any breakdowns for other companies’ products like Playstations, Xbox Ones, smart TVs or tablets. Do people also break down components costs for automobiles and refrigerators on the internet? Show me those websites if they do. What is being proved by this? Wall Street claims Apple doesn’t make big enough profit margins and downgrades the company. Apple tries to improve profit margins and people are still bitching. Consumers are buying iPhones so it doesn’t seem to be that big a deal to them what Apple is charging for an iPhone. When Cartier sells a Tank Watch, I’m sure they must be making plenty of profit but I’ve never seen a cost breakdown of all the components in a Tank Watch. Everything we buy must have some component costs that come out less than what we pay for the item. One would think that something like paper clips must have huge profits because there isn’t much involved in making them after the first hundred million paper clips or so pays for the machinery. They sure don’t change much over the years.