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iPhone 7 Estimated to Cost Apple $224.80 to Produce, Yet Starts at $649!

by Jed John 657 views13

Research firm IHS has come out with a controversial claim that the iPhone 7, from their estimates costs Apple just $224.80 even though Apple sells the flagship for twice that amount or more. The base version of the iPhone 7 with 32GB of built-in storage sells for $649. The Research firm took apart the iPhone’s parts and also put into consideration several factors before arriving at that damning conclusion which doesn’t include the iPhone 7 Plus.

iPhone 7 teardown

IHS first x-rayed the cost of last year’s iPhone 6s and got an estimated production cost of about $211.50 which ordinarily suggests this year’s iPhone 7 will cost more. Considering the base storage has been ramped up from 16GB to 32GB and that could have affected the production cost. Apart from that, the new chips on the iPhone 7 could also have affected the final production cost. The A10 chip is estimated by IHS to cost $26.90, then the new display cost an estimated $43 to produce as well as the cameras coming in at $19.90 per iPhone unit.

Though Apple is not keen on discussing tear-down costs, this estimated data could indicate mounting pressure on the US-based company’s profit margin, because the cost may even be more. IHS didn’t take into consideration factors like warehousing, research and development, and marketing.

iPhone 7

The iPhone 7 even at that is considered to carry an outrageous price tag considering its specs. Reference have been made to competitively priced flagships whose specs are at par with the iPhone 7’s. The most recent is the LeEco Le Pro 3 which despite having a Snapdragon 821 chipset and a huge 4070mAh battery, starts at 1799 Yuan ($270). The Le Pro 3 pricing highlights LeEco’s negative profit pricing strategy for devices. The company makes up for this by getting more people onto the expansive LeEco Ecosystem from where it aims to make profits when users buy contents, applications and services on their platform.

(Source)

 

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  • Frans

    Absolutely idiot to make this comparison. The cost of design, distribution, manufacturing and superb support are not included. When there is a new iOS released, you have it in a few hours. When a new version of Android is released you probably have it when you buy a new phone.

    • Wolvie

      Ahem, talking about apple diehard fanboys LOL

      • Frans

        Ahem, I use both Android and iOs and they both have there benefits. So, about the updates: Nougat has been released. Raise your hand if you have a copy on your phone.

        • Jed

          Me… I have a copy of the logo on my phone,,,lol

  • PhoneFix

    425 profit per unit

    • Adulle

      You’re wrong. This is just the production cost. You need to add, salaries, R&D, marketing, support etc to the production cost.

      • PhoneFix

        well from 425000000000 as they said only 1 bilion ipphens been sold plus other idevices so could be 600.000.000.000 they pay out all those things .. they are DEFO in HUGE profit

    • Jed

      Can’t be up to that, other factors weren’t considered,,,,marketing, warehousing, research and lots of other nitty gritty issue that must have come to play. But then, Apple should be making a pretty good amount of profit but in the end that just might nt bee enough cos the number of units sold might be less than expected,,,,The new chicks in town are way cheaper than this expensive babe men! And they all look pretty and well packaged!

      • PhoneFix

        they has it all for free

  • Monster Energy

    200$ only for 4GB+32GB, 13MP+8MP, NFC, Fast & Wireless charging, octa-core 3000mAh 5.5″ FHD super beast called elephone P9000, nowadays medias don’t know anything about hidden monsters

    • yesman

      A single core of the A10 chip is faster than the whole octa-core processor of the elephone… The price for premium

      • Jed

        hehehehehehe

      • Monster Energy

        yes, but those smartphones never lags..