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Latest iPhone cost estimate comes in at $30 bucks

Posted: , by Charlene S.

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Latest iPhone cost estimate comes in at $30 bucks
With the help of additional information brought to light by an ABC Nightline report that covered Apple’s manufacturing partner, Foxconn, Asymco analyst Horace Dediu has taken a second look at the iPhone manufacturing process and determined that the device costs a little more than previously assumed to make.

Previous estimates, based entirely on hardware teardowns, thought that the iPhone cost about $8 a unit to produce. Breaking down the 24 hours that it has been previously reported that the iPhone takes to build, Dediu accounted for the potential human labor hours involved and multiplied those estimates with the labor rates reported by ABC, which were $1.78 an hour.

Using that information, he has estimated than an iPhone costs roughly $30 to produce. He does note, however, that there is an additional $60 associated with each device to account for transportation and warranty expenses.

Even with the most conservative estimates, we know that an iPhone generates about $650 on average, so however you slice it, the iPhone is a high margin device for Apple.

source: Asymco via SlashGear

44 Comments
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posted on 23 Feb 2012, 17:11 2

1. corporateJP (Posts: 1762; Member since: 28 Nov 2009)


Still mad profit, son.

posted on 23 Feb 2012, 17:22 10

2. gfresh404 (Posts: 12; Member since: 21 Jan 2012)


Apple overcharges for everything - this isn't anything new. Still kinda cool to know the exact numbers tho

posted on 23 Feb 2012, 17:59 3

9. k1ng617 (Posts: 264; Member since: 13 Oct 2009)


I love Android (Last three phones were/are Androids) But, it's only overcharging if people aren't willing to pay it.

posted on 23 Feb 2012, 18:26 2

13. 14545 (Posts: 1144; Member since: 22 Nov 2011)


Actually, economically speaking, I don't think it is possible to "overcharge" for something. Speaking strictly on supply and demand, the amount of demand will change as the price rises. iDrones just don't understand the concept of money.

posted on 23 Feb 2012, 19:07 3

16. Tux4g63 (Posts: 118; Member since: 21 Oct 2011)


when the human ego and hubris is involved, people will pay anything to feel like they "have it."

posted on 23 Feb 2012, 19:35 1

18. clevername (Posts: 1431; Member since: 11 Jul 2008)


You know if people have the money to spend on extravegant things they want let them. Doesn't mean they have no concept of money. On the contrary if they can afford these things they probably have a great concept of money and how to make it. I paid the same for my galaxy s 2 as I did for my iPhone 4 a couple years ago. It I'm paying the same regardless of OS then it has nothing to do with the concept of money.

posted on 23 Feb 2012, 19:41 1

20. tedkord (Posts: 5129; Member since: 17 Jun 2009)


Nobody is saying people shouldn't be able to spend however much they want on any item they want. I think it was just a comment on them paying for the brand name. $100 worth of product, $100 worth of R&D and $450 worth of having the Apple logo on it.

My wife is the same way - she's willing to pay $400 for a purse just because it's Coach. It drives me nuts, because it's got about $20 worth of materials and labor in it, and it doesn't do anything an actual $20 purse can't. (And, it's ugly as sin. At least the iPhone 4s is pretty)

My sister in law is even worse - she won't buy anything that isn't the most recognized brand, even if it's known inferior quality. (She has an iPhone 4 she bitches about constantly for signal loss issues, but won't consider any other phone, even though she doesn nothing on it that most feature phones won't do.)

posted on 23 Feb 2012, 20:11 5

24. quakan (Posts: 1214; Member since: 02 Mar 2011)


Well we do live in a society that has a way of trying to make people feel inferior if you don't have the most cash (or more than the people around you) or best things. It's what keeps some people from being to get ahead in life because some people, in many cases, will put their wants before their needs because they need to constantly reassure themselves that they are good enough. Spending money makes people feel good. Having the best things (or what is perceived as best) makes people feel good. So while you're wife may not need that $400 purse, it makes her feel good and while you're sister in law doesn't do more with her iPhone than she would with a feature phone, it makes her feel good to say she has one.

posted on 23 Feb 2012, 21:15 2

26. tedkord (Posts: 5129; Member since: 17 Jun 2009)


Got another sister in law who's like that. Didn't pay her rent one month because she bought a $600 dog. Other times skipped bills to buy other useless items just to have them.

I don't know, I'm just not like that. I bought a house that was well within my budget (not a huge house), I refuse to build up major debt - mainly because I want to not have to work until I'm 80 or drop dead, whichever comes first. I like having toys, but I won't buy something like that unless I can pay outright without shorting the mortgage, or electricity, water, gas, etc...

posted on 24 Feb 2012, 01:01 1

31. remixfa (Posts: 14079; Member since: 19 Dec 2008)


lol.. ted.. my wife is the same way.. she's coach nuts.. and she buys those crazy stupid purses.. its a guy thing i think. i could get one of those $1 canvas pouches from publix and do the same thing that her $300 purse does...

ill never understand. lol

posted on 23 Feb 2012, 21:57

28. cellphonator (Posts: 298; Member since: 29 Oct 2011)


@ Clevername. Maybe you should write a double post just to make sure he, the "economically speaking" poster understands it completely.

posted on 25 Feb 2012, 04:07

44. bayusuputra (Posts: 941; Member since: 12 Feb 2012)


haha, the terms overcharging and high profit margins themselves comes from economics, how can you say that it is impossible to overcharge something economically speaking.. if you said historically or biologically speaking, then yes, it is impossible..

posted on 23 Feb 2012, 17:24 7

3. clevername (Posts: 1431; Member since: 11 Jul 2008)


Love or hate apple, you gotta wish you owned stock in the company.

posted on 23 Feb 2012, 17:34 3

4. darkkjedii (Posts: 12390; Member since: 05 Feb 2011)


Exactly,I know I wish I did. People harp on apple for doin big business... Isn't that what a capitalistic America is all about? Get off apple,and go bug exxon.

posted on 23 Feb 2012, 18:54 3

14. HTCiscool (Posts: 449; Member since: 16 Jul 2011)


That's like saying you with you'd invested in Cocaine in 1980 and hid it in your basement. You'd make a lot of profit but...

posted on 23 Feb 2012, 19:37 5

19. clevername (Posts: 1431; Member since: 11 Jul 2008)


Kinda wish I did invest in cocaine! Sh*t makes money!

posted on 24 Feb 2012, 01:02

32. remixfa (Posts: 14079; Member since: 19 Dec 2008)


howa bout if i invested in it from 1990 on? heroin was all the rage then.. cocaine probably took a downturn then.. now its all the rage gain..lol

posted on 24 Feb 2012, 08:52

36. clevername (Posts: 1431; Member since: 11 Jul 2008)


That's what's called minimum investment, maximum return!

posted on 24 Feb 2012, 10:48 1

37. jamrockjones (Posts: 345; Member since: 26 Oct 2011)


It's true, but it gets to the point of just being unethical, charge what you want if people are willing to pay, but how about upping the pay for the workers who produce the device.

posted on 24 Feb 2012, 04:19 2

35. AhmadAlsayegh (Posts: 254; Member since: 18 Jul 2011)


shares with a company that does not give shareholders dividends? no thanks! i'd rather buy microsoft shares at 30 bucks, and get 0.17$ for each share

posted on 23 Feb 2012, 17:35 9

5. jmoita2 (Posts: 930; Member since: 23 Dec 2011)


Screw that!!! I would never own Apple stock. It's kind of like looking at a very profitable mining operation that uses child slaves in those hell on Earth places in Africa,and wishing you had a piece of the action.

posted on 23 Feb 2012, 18:07 3

10. squallz506 (banned) (Posts: 1075; Member since: 19 Oct 2011)


or telling your accountant you want to invest in meth futures

posted on 24 Feb 2012, 00:41

29. iWallE (Posts: 48; Member since: 10 Oct 2011)


@jmoita2. Not really. Actually many other companies use workers in an even uglier way than Apple does. It's just that people don't know that, because these companies aren't as much in the spotlight as Apple is. Truth be told, if you really feel like you say, you probably shouldn't buy any consumer electronics. If that's not the case, than I see no logical reason to judge Apple more than anyone else. Yes, success provokes hatred and I sometimes also hate Apple for destroying competition and trying to rule the market. But trying to find an excuse for your opinion and feelings is unnecessary. All big companies follow more or less the same models (or at least they try to).

posted on 23 Feb 2012, 17:39 7

6. christianqwerty (Posts: 460; Member since: 05 May 2011)


Before you go bashing apple for that horrible labor, why don't you look at the things you use and eat everyday. Many other companies are guilty for the same charge, It doesn't make it okay, but apple isn't the only one

posted on 23 Feb 2012, 18:14 6

12. bigboy029 (Posts: 74; Member since: 03 Jan 2011)


sorry but nobody on this site understands that. It's only Apple, of course.

posted on 23 Feb 2012, 19:47 4

21. tedkord (Posts: 5129; Member since: 17 Jun 2009)


We all understand it, but since Apple profits the most from it, they have more of a responsibility to ensure it changes. (Or, *gasp*, produce the phone in their own country, for decent wages - there's plenty of room in that profit margin for that! Maybe support your own country and citizens)

posted on 24 Feb 2012, 00:47 1

30. iWallE (Posts: 48; Member since: 10 Oct 2011)


Apple produces in China not (only) because of the low wages, but because it's easier. What US company could turn its production schedule upside down overnight, because someone at Apple made a change to the product in the last moment?

posted on 23 Feb 2012, 20:11 2

25. TechnoTechyes (Posts: 56; Member since: 24 Jan 2011)


Response is to BigBoy
I don't think you get what people have an issue with. People are extremely mad at Apple, because they are holding technology hostage. They have patents for swipes and hot spots (on a mobile device). To be honest the patent office should never grant such patents, but they did, and Apple is using that to stop technology from progressing outside their company.

Google has supported Apple products for a long time, in the meantime Apple has attacked Google's partners. Someday that'll give (maybe tomorrow). And Google will turn off YouTube, Google Maps, and Google Search on iProducts and even Safari.

posted on 24 Feb 2012, 01:07 2

33. remixfa (Posts: 14079; Member since: 19 Dec 2008)


to iwalle..

if apple offered an american company a multi billion dollar a year contract, they would turn as fast as they could as long as it was ETHICAL.. which is apple's biggest problem.. they dont care about ethics.. only about profit margins..

Techno,
apple is holding very little actual technology hostage. they are hoding a swath of bullcrap patents that they never should have gotten hostage.. that + bar nakpin drawings.
If google were to act like apple for 1 day, apple would feel the rath, as most of apple's best apps go through google at some point or another.

posted on 24 Feb 2012, 18:02

41. downphoenix (Posts: 2381; Member since: 19 Jun 2010)


Cant wait for this day to come, this will be a wakeup call to the lesser ifans out there. We'll be seeing a lot of Android converts soon. Google doesn't play ball that way, and I doubt they will in the near future unless Apple continues its sue happy ways perhaps.

posted on 23 Feb 2012, 17:44

7. ivanko34 (Posts: 617; Member since: 04 Sep 2011)


A slave is not paid but you must pay his food

posted on 23 Feb 2012, 17:45 5

8. Johnny_Mnemonic (Posts: 240; Member since: 05 Oct 2011)


Like I said before people who buy iPhone aren't that smart jaja.

posted on 23 Feb 2012, 18:08

11. alfadolla (Posts: 28; Member since: 14 Mar 2011)


nice too know thier profit margin .....it's like the first storm of the winter season! can you say make it rain? now I see why the apple falls from the tree too make more paper...lol, good for them

posted on 23 Feb 2012, 18:55

15. HTCiscool (Posts: 449; Member since: 16 Jul 2011)


This estimate is highly, highly, highly suspect

posted on 23 Feb 2012, 19:22 1

17. Jphones (Posts: 235; Member since: 10 Feb 2012)


That's sweat shop you inconsiderate jerks should be illegal but yet again all this world carex about is money. They should be sued by Mankind for being complete capitalistic jerks and not caring about how they treat people. They treat money better than they treat people. Hope some organization steps up an sues Apple to make an example of them and sets a new standard for fair labor practices world wide.

posted on 23 Feb 2012, 19:50 2

22. tedkord (Posts: 5129; Member since: 17 Jun 2009)


Sues them for what, exactly? Like it or despise it, Apple aren't breaking any laws. Even if there are laws being broken, Foxconn would be on the hook, not Apple.

Now, I have no problem with people making these corporations squirm by exposing the working conditions in their contract partner facilities.

posted on 23 Feb 2012, 19:53 2

23. Jphones (Posts: 235; Member since: 10 Feb 2012)


Sue them for being horrible human beings and treating other humans as mules. An Apple knows exactly what's goin on as much as they sue people they to darn nosey not to know what their partner in crime is doin.

posted on 23 Feb 2012, 21:21

27. tedkord (Posts: 5129; Member since: 17 Jun 2009)


Sorry, but that lawsuit would get laughed out of court. You can't sue for just any old reason.

posted on 24 Feb 2012, 01:52 3

34. frydaexiii (Posts: 1239; Member since: 01 Dec 2011)


Nice to know people are paying $150 for an Apple sticker...

posted on 24 Feb 2012, 13:13 3

40. -box- (Posts: 3864; Member since: 04 Jan 2012)


Technically closer to $500. The 4S is $650 without a contract, so let's say it's $100 to manufacture, ship, and warranty, $50 for the OS, and $500 for the apple logo

posted on 24 Feb 2012, 11:45

38. gallitoking (Posts: 4690; Member since: 17 May 2011)


thats a picture of a happy foxconn worker...

posted on 24 Feb 2012, 12:06

39. Johnny_Mnemonic (Posts: 240; Member since: 05 Oct 2011)


Apple payed her good Money for that smile

posted on 24 Feb 2012, 18:39

42. remixfa (Posts: 14079; Member since: 19 Dec 2008)


its probably an actor

posted on 25 Feb 2012, 00:25

43. frydaexiii (Posts: 1239; Member since: 01 Dec 2011)


Of cause she's happy. God knows how much they've been brainwashed to make it seem like an honor to built Apple's crap or even be in it's presence for a dollar per hour...

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