What it costs Apple to make the 6S

[Charmonium]

NOTE: This is only the parts costs but still enlightening. As the article notes, there are still manufacturing and distribution costs. Even so, with a starting price of about $750, it seems steep.

The biggest part of that cost is $127 for semiconductor pieces, including $36 for the various cellular radios, $25 for the new 64-bit A9 processor, $22 for various sensors (fingerprint, NFC, and so on), and $20 for 64GB of flash memory. Other core components like the screen, camera, and battery will add up to $73, and the other stuff (like the case) will add another $33. The older models are cheaper for Apple to make, as the cost of their components has come down over time.

http://www.businessinsider.com/iphone-6s-component-costs-by-model-2015-9

 

[sweenish]

Big Macs cost McDonalds ~$0.30 .
Books cost pennies.

Very few products have small margins. This is par for the course.

Because like you mentioned, manufacturing and distribution aren't factored in. Neither is marketing or R&D.

Granted, maybe they're still over-charging, but that's how Apple likes it.

 

[Fardringle]

Granted, maybe they're still over-charging, but that's how Apple customers like it.

Fixed.

 

[kpkp]

Isn't the margin on iPhones about 40%? That is more valuable data than some parts estimate.

 

[Charmonium]

Fixed.

That's true. Having a high status brand let's you get away with overcharging because it plays into the self-image people want to create. Personally, I like getting something for my money other than a designer label on my clothes or my gear. But that's a minority view.

 

[kyrax12]

That's true. Having a high status brand let's you get away with overcharging because it plays into the self-image people want to create. Personally, I like getting something for my money other than a designer label on my clothes or my gear. But that's a minority view.

Minority view my ***. Some people that live frugal lifestyles wants the most bang for their buck.

Me included.

 

[stlc8tr]

Or some folks just want something that's easy to use and "just works".

 

[gorcorps]

Doesn't this come up every single time there's a new phone released? Is anybody shocked that companies are trying to make money?

 

[AznAnarchy99]

Doesn't this come up every single time there's a new phone released? Is anybody shocked that companies are trying to make money?

I don't know about you but if I owned Apple and I could get away with charging people $5000 for a phone I would.

 

[destrekor]

Why focus on Apple? This is what it has always been for the hot new phones, so long as they are billed as premium models. You can get cheaper phones, sure, but really, it seems there are very few phones for which have people really seen the MSRP.

Apple has a little bit more premium, but really, think about it: they tend to have better materials and parts. I highly doubt a Galaxy S6 Edge costs as much to make as an iPhone 6. In the end, I wouldn't expect Apple to be commanding much more of a margin, if any.

 

[SAWYER]

Good for Apple, any for profit business would be thrilled to be in this position

 

[mnewsham]

Why focus on Apple? This is what it has always been for the hot new phones, so long as they are billed as premium models. You can get cheaper phones, sure, but really, it seems there are very few phones for which have people really seen the MSRP.

Apple has a little bit more premium, but really, think about it: they tend to have better materials and parts. I highly doubt a Galaxy S6 Edge costs as much to make as an iPhone 6. In the end, I wouldn't expect Apple to be commanding much more of a margin, if any.

The Galaxy Note 5 is estimated to cost right around $300 for the components, not counting R&D, distribution, etc.

The S6 edge is estimated to cost about the same at $290-300

The S6 edge+ even more expensive at ~$330

Higher res displays, better camera sensor, larger battery, UFS 2.0 memory, etc. No real shocker that they cost more to make.

 

[AznAnarchy99]

The Galaxy Note 5 is estimated to cost right around $300 for the components, not counting R&D, distribution, etc.

The S6 edge is estimated to cost about the same at $290-300

The S6 edge+ even more expensive at ~$330

Aren't a lot of their components in-house though?

 

[destrekor]

The Galaxy Note 5 is estimated to cost right around $300 for the components, not counting R&D, distribution, etc.

The S6 edge is estimated to cost about the same at $290-300

The S6 edge+ even more expensive at ~$330

Something isn't right about that, not at all. Samsung controls almost the entire production - Apple sources stuff. And Samsung uses a lot more plastic. How the hell does it cost more?

edit: also, the S6 Edge has an MSRP close to $700. It can be found cheaper, sure, which isn't as easy to do with Apple, but that's also because of how the market works. Android devices just don't hold value nearly as well (comparatively, and from the viewpoint of the general market), and sales are often and can be significant. Apple commands more and price drops aren't needed to move product.

 

[mnewsham]

Something isn't right about that, not at all. Samsung controls almost the entire production - Apple sources stuff. And Samsung uses a lot more plastic. How the hell does it cost more?

More RAM, bigger & higher res screens, bigger battery, more advanced camera sensor, wireless charging, go down the list. Iphones have always been lower specced than high end android phones.

 

[mnewsham]

Aren't a lot of their components in-house though?

Doesn't make it free, they source them from themselves, but they also pay themselves for the parts. Samsung mobile buys x chips from samsung fabs, sure it's all internal samsung, but it's not like it's free.

 

[mnewsham]

 

[flopper]

never bought apple stuff never will.
and I am one of the smart people.

 

[Ns1]

what, you mean a business is supposed to make a PROFIT on the stuff that it makes? GTFO socialist scum.

 

[HeXen]

What is it you guys say about gaming PC's? "Build it yourself". Well there ya go, build your own iPhone then and save that precious $$$.

 

[Ns1]

What is it you guys say about gaming PC's? "Build it yourself". Well there ya go, build your own iPhone then and save that precious $$$.

you don't save money building PC's yourself

 

[destrekor]

you don't save money building PC's yourself

Sure you can. You may want to select a more premium option for each part and thus bring the cost up, but if you didn't save up front, it's likely you saved long-term post-warranty. If you didn't splurge for a better type of each part and accessory, you could definitely have a better and cheaper system compared to a boutique.

You might have trouble making a PC cheaper than a Dell or Compaq with equivalent specs due to their buying power and low margin, but you can easily build an Alienware for less.

At least, last time I tried even comparing specs it was that case. Has it changed? I cannot imagine it has, as the boutiques, while they have grown in number and compete more, still have the premium prices.

 

[Ns1]

You might have trouble making a PC cheaper than a Dell or Compaq with equivalent specs due to their buying power and low margin, but you can easily build an Alienware for less.

I can see this; but in my experience for the < 1k price range, the cost of the operating system alone kills any potential savings.

Of course if you use a free copy of windows, that's a moot point.

 

[destrekor]

I can see this; but in my experience for the < 1k price range, the cost of the operating system alone kills any potential savings.

Of course if you use a free copy of windows, that's a moot point.

Yeah, there's that too. That damned license. System builders definitely got a big deal for bulk licensing.

 

[burninatortech4]

Semi-suprised the display is more costly than the processor on these phones.