Almost every year when a new iPhone arrives, the hype and mania surrounding it over the Internet blogosphere lasts days, if not weeks. People would praise it, blast it, experiment with it, “blend” it, compare it, go crazy over it, and someone would definitely tear it apart to figure out the component cost incurred when putting together an iPhone. Well guess what, now that the iPhone 6s and iPhone 6s Plus are here, the teardown games have begun.
The component cost of the new iPhone 6s comes in at $234, for the 64GB variant, according to estimates provided by Bank of America Merrill Lynch. This is slightly more than last year’s iPhone 6 which cost $205.8, with the iPhone 6 Plus costing $222.8. Naturally, this year’s iPhone 6s offers more of a hardware upgrade as compared to last year’s iPhone 6, primarily in the form of the 3D Touch panel and a stronger aluminum alloy, to name a few.
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.
One of the charts provided by BofA Merrill Lynch is particularly interesting, as it provides the cost breakdown for not just the iPhone 5s and above, but also breaks it down by semiconductor cost, component cost and other parts cost. What’s interesting is how Apple has been able to keep the other parts cost consistent over last 2 years, but the semiconductor cost is on a rise from the iPhone 5s to iPhone 6s. It doesn’t come as a big surprise, either; the Cupertino-based company has consistently improved its semiconductor technology, and slimmer devices naturally mean higher production cost.
While this breakdown is an interesting statistic to look at, it doesn’t indicate that Apple is making $515 in approximate profit on the unlocked iPhone 6s 64GB model, which retails at $749. This is merely a component cost breakdown, and does not include things like marketing costs, manufacturing overheads and distribution, not to mention the amount spent on R&D behind advanced technologies such as 3D Touch.