It Costs Apple About $200 to Build an iPhone 6 [Video]

Apple spends just $200 to $247 in parts and labor to build an iPhone 6 and between $216 to $263 to build the iPhone 6 Plus, according to a teardown analysis of the device by IHS. Of course, this number does not include costs such as research and development, advertising, etc. The iPhone 6 model sells for $649 to $849 without a contract and the iPhone 6 Plus model sells for $749 to $949.

Re/code, who was provided an early copy of the teardown analysis, says that although Apple charges $200 more for the 128GB model, it only pays $47 for the additional memory. That means that profit margins are slightly higher (1%) on the 128GB models than on the 16GB models.

Apple's profit margin on the 128GB iPhone 6 devices is about 70% and it's about 69% on the 16GB models.


“They seem to be configured and priced to encourage you to buy the models with the higher memory,” said Andrew Rassweiler, the IHS analyst who supervised the teardown. He estimates that Apple is paying a price of about 42 cents per gigabyte on the flash memory, which is supplied by numerous companies, including Micron and SK Hynix.

This is in line with the iPhone 5 and iPhone 5s which had a gross margin of 69%. The iPhone 5c had a gross margin of 68%. Compare those to the original iPhone with a gross margin of 55%.



The most expensive part in the new iPhones is the combined touchscreen display assembly. Produced by LG Display and Japan Display those cost Apple $45 for the iPhone 6 and $52.50 for the iPhone 6 Plus. Gorilla Glass is still used to protect the display, despite all the sapphire rumors.


The A8 processor was manufactured by TSMC as predicted. IHS says TSMC is currently producing 60% of chips for Apple, while Samsung is producing about 40%. The A8 processor plus its co-processor that handles sensor information is said to cost a combined $20. It's 13% smaller than the A7 and $3 more expensive.

Notably, while the NFC chip is from NXP as predicted, a second company called ams AG made a NFC booster chip that increases the NFC chip's signal range and performance.

Strangely, Apple also added a second accelerometer to the iPhone 6. There's one from InvenSense and a new one from Bosch Sensortec. "We’re not sure why the second accelerometer is there," Rassweiler said. "It may be for increased accuracy." Bosch also supplied a barometric sensor for detecting altitude.

As before, Broadcom and Qualcomm provided chips for Wi-Fi and Bluetooth and for connecting to the cellular phone network, as well as power management chips to go with them.

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Check out a sped up video of the teardown below...

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