Apple launched the next generation iPhones, iPhone 7 and iPhone 7 Plus earlier this month. Apple has done away with the 16GB storage variant and chose 32GB as its base variant. As for the pricing of the iPhones which are always the talk of the town, the iPhone 7 32GB starts at $649, 128GB at $749, and the 256GB variant at $849. As for the iPhone 7 Plus, its 32GB variant starts at $769. As for India, the iPhone 7 will start at a price of Rs 60,000. Keeping in mind the high price tags that Apple iPhones have always come with, the manufacturing costs of the iPhones are always something interesting to look forward to. Analytics company IHS Markit regularly conducts a teardown of the newly launched iPhones. In its latest report, IHS Markit has given a preliminary estimate of the manufacturing cost for the iPhone 7. Also Read - Apple shines in June quarter, posts record sales for iPhones, Macs and iPadsAlso Read - Friendship Day gifting ideas for your young tech-savvy besties under Rs 5,000
According to IHS Markit, the Bill of Materials (BOM) for the iPhone 7 32GB variant comes to $219.80 (Rs 14,745 approximately). Add $5 of basic manufacturing costs, and the total cost to manufacture the iPhone 7 comes to $224.80. If we compare it with the unsubsidized rate of the iPhone 7, the calculation reveals Apple s profit would round off to a whopping $325. Compared to the IHS teardown report of the iPhone 6s Plus, which was launched last year, Apple had to spend $36.89 lesser to manufacture it. This is all based on the preliminary estimate of the iPhone 7 32GB variant. After the final review is completed, the results could vary.
IHS has also compare the total manufacturing to that of Apple s rival Samsung. 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. Despite this, Apple still makes more margin from hardware than Samsung but material costs are higher than in the past,” he added.
Commenting on why the manufacturing costs could have incurred up to $224.80, Andrew Rassweiler, IHS Markit explains that the shift from storage options of 16GB/64GB/128GB to 32GB/128GB/256GB definitely puts pressure on the bill of materials costs.” Another factor pointed out was the Jet-blacked polished case of the iPhone 7, which has been newly introduced this year. Wayne Lam, IHS Markit, says that this feature is lower yielding, time-intensive manufacturing step that adds cost, as well as considerable value, pushing the retail price higher for those requesting this option. ALSO READ: Apple iPhone 7, iPhone 7 Plus price in India for all variants revealed ahead of October 7 launch
IHS is yet conduct a teardown analysis for the iPhone 7 Plus which would give the final estimate of how much Apple s profit would come to from the sales of the iPhone 7 Plus. The Apple iPhone 7 and iPhone 7 Plus are already begun sale in the US and it will reach the Indian market on October 7. As for its current sales, the iPhone 7 accounts for 1 percent of total iPhone market share and the iPhone 7 accounts for 0.2 percent, according to research firm Localytics. As the global sales begin, we would get a better idea of how the new generation iPhones are doing in the market in comparison with the predecessors. ALSO READ: iPhone 7 Plus teardown video shows why Apple ditched the 3.5mm audio jack