Apple iPhone 7 Manufacturing Costs Revealed

Whenever a new flagship mobile handset is released by Apple or Samsung, it’s interesting to read about the cost of materials and the ease of disassembly. Recently, Apple announced the new iPhone 7 and discussed the device’s improved optics, A10 SoC and IP67 water resistance. Even though it’s not a revolutionary step, the sales look promising thus far. According to the latest research by IHS, the materials bill for an iPhone 7 equipped with 32GB of NAND flash memory comes to an estimated total of $219.80. Additionally, a $5 fee is added to take into account the manufacturing costs. As you can see, the predicted price for producing a single iPhone 7 is $224.80. Interestingly, this is $36.89 more than the iPhone 6S which suggests the new iPhone employs pricier components.

Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit said:

“Total BOM costs for the iPhone 7 are more in line with what we have seen in teardowns of recent flagship phones from Apple’s main competitor, Samsung, in that the costs are higher than in previous iPhone teardown analyses,”

“All other things being equal, Apple still makes more margin from hardware than Samsung, but materials costs are higher than in the past.”

Currently, the iPhone 7 with 32GB of storage has a recommended retail price of $649.99. It’s important to not make a direct comparison between manufacturing costs and the retail price because a lot of the money goes into research and development. Nevertheless, the materials bill is useful information and gives us an insight into Apple’s production line.