The $400 iPhone SE costs Apple just $160 to build, according to IHS teardown

The $400 iPhone SE costs Apple just $160 to build, according to IHS teardown
Since it essentially looks the same as the preceding iPhone 5s, you can readily recycle your old cases (and many peripherals) for use with the new iPhone SE. Most of the key changes are to be found under the hood, and thanks to a recent Chipworks teardown, we got a good look at the innards of Apple's latest export. Now, IHS has decided to get in on the act, and along with revealing the guts of the new iPhone SE, has estimated that it costs Apple a mere $160 to build the new handset. 

One of the key selling points of the iPhone SE, beside the 4-inch display for those who don't subscribe to the trend of larger screens, is the fact that you get all of Cupertino's high-end hardware at a modest-for-Apple $399 starting price. The iPhone SE is essentially an iPhone 5s kitted out like an iPhone 6s, and to those unperturbed by more sizable devices, is easily among the best in its field. There's no question that Apple has done well to consolidate such power and features into a more affordable parcel than its flagship. Judging by IHS' guesswork, however, the already cash-rich firm is still turning a very handsome markup.

The $399 16 GB iPhone SE model costs around $160 to make including components and manufacturing according to IHS, whose findings once again demonstrate just how greatly Apple's margins increase per storage increment. Many commentators and consumers have pleaded with Apple to offer expandable storage by means of a microSD slot over the years. Unsurprisingly, this has fallen on deaf ears, since the fruit company tends to charge an extra $100 at every wrung of the storage ladder. Case in point, those seeking more real estate with the iPhone SE will have to pony up $100 more, or $499, for the 64 GB variant. To Apple, however, the 64-gig edition apparently costs $170 to manufacture, which is a mere ten-buck increase on its side. 

The general reception to the iPhone SE has been one of positivity. The past few years has seen smartphone display diameters rise sharply in a shift that has also forged a market for phablets. As such, most existing ~4-inch smartphones are under-powered, or at least not up to what the majority would consider as high-end. 

If the iPhone SE does sell strongly, you can bet that it will have plenty of similarly spec'd company in the not-too-distant future. Having said that, the early signs are not looking too promising

source: Businesswire via Re/code

Related phones

iPhone SE
  • Display 4.0" 640 x 1136 pixels
  • Camera 12 MP / 1.2 MP front
  • Processor Apple A9 APL0898, Dual-core, 1840 MHz
  • Storage 128 GB
  • Battery 1624 mAh(14h 3G talk time)

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28 Comments

2. sumpil

Posts: 91; Member since: Feb 02, 2016

Wow! if they wanted to make a large profit and also help shops with some profit they could have easily priced the phone at $300, they could take $70 and the shop could take $70 and Apple can still pay the suppliers $160 for the parts and manufacturing- These greedy people.

31. Finalflash

Posts: 4063; Member since: Jul 23, 2013

But it's 160 new with all components being built from zero. This is not the case, as Apple showed with their recycling robot. Half those components come from traded in iPhone 5 and 5s phones from 3 years ago. Some of the most expensive stuff like screens and chassis are reused and so likely, this phone costs Apple maybe 100 or so at best.

3. GreenMan

Posts: 2694; Member since: Nov 09, 2015

Everyone makes money with Apple (TM)...!!! Okay, seriously now... Since iOS isn't open source, I think Apple charges extra for iOS Software 'ownership' (Not sure what word would be appropriate, LOLz!) ... Just like Windows for Desktop...! BTW, if that's really the case, then its ridiculous...

10. marorun

Posts: 5029; Member since: Mar 30, 2015

Well thats one of the reason i dont like Apple. No one else make ios device so they can price themself at any price because if you want ios as an OS you wont have any choice.

18. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Windows cost $99 and does way more than any desktop OS in the world, whether that OS is free or cost money. The fact should be thins, the larger the potential sales market, the lower the price could be. The problem is, sales on phones are only high for a single quarter. In order for Apple to maximize costs, they have to consider the downtime for the 3 quarters where sales will sharply fall. As we saw with the iPhone 2015, initial sales were over 70M+, then the last quarter they fell to 50M, which means in Q3 they will fall by at least another 25M and then trickle off more and more as the new phone is closer to release. Then there is a small pickup in sales when a new model forces a price drop on older models. The ohone in fair, is only worth 50% more than it costs to make. So if Apple sold it ay 299-$350, that would have been a fair price. Especially since I can get a brand new phone with all new parts and not reused ones for $400, that is larger and just as fast as the 5SE.

7. zeeBomb

Posts: 2318; Member since: Aug 14, 2014

Meh doesnt surprise me

8. strainger

Posts: 7; Member since: Apr 04, 2016

This thing costs around 580$ in my country

11. marorun

Posts: 5029; Member since: Mar 30, 2015

Yep thats the biggest issue we have here in Canada as well. Should end up 450$ cad ( to compensate for difference in money value ) but not more.

13. gaming64

Posts: 234; Member since: Mar 22, 2016

The secret to Apple's riches. Customer raping.

14. Trakker

Posts: 283; Member since: Feb 11, 2016

That's where Apple saves so much money by changing as little as possible each year and use marketing to seem like there's major changes. If Samsung could get away with so few changes and massively reduced R&D they would be a lot more profitable.

38. AlikMalix unregistered

If Samsung had to build their own OS and ecosystem and then maintain it throughout the world and not smooch off already built platform and ecosystem - they would be a lot less profitable. But there's only one company that does that - it's Apple everyone else keeps falling on their face trying to do what Apple did.

15. Arch_Fiend

Posts: 3944; Member since: Oct 03, 2015

Well that's a better deal than the 6s and 6s plus, they cost $200-$216 to make and cost $649-$749 to buy. Apple profits way less of the SE, only $240 compared to the $449 and $533 they get from 6s/6s plus sells.

16. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Well this shows just how overprice $649 is for the 6S. After all, I am sure the components and slightly larger case at .7" is an extra $250. Wow, Apple's markup is huge. Maybe if there was only one Android OEM, they could markup the cost like that too and make a serious killing.

19. GreenMan

Posts: 2694; Member since: Nov 09, 2015

@TechieXP1969 Nokia used to charge the same "markup" on its Symbian Phones notable The flagship N Series... Not to such extent as Apple, but the premium on N Series was still fairly steep... I wanted to buy an N97 once, and the price made me wanna cry!!! $700 Aussie Bucks, Woah!!! But now it looks pretty cheap in front of iPhone 6S Plus!!! I mean, it was The 6S Plus of its time right Will you ever forgive me, Nokia?

40. zunaidahmed

Posts: 1182; Member since: Dec 24, 2011

This is actually a good point. Nokia did the same which made them fail miserably, let's just hope apple does not go down the same path.

20. redmd

Posts: 1911; Member since: Oct 26, 2011

Too bad. People would buy this anyway. The i logo is hypnotizing

22. htcisthebest

Posts: 434; Member since: Nov 15, 2011

Only the blindest human being will buy this piece of junk

26. 87186

Posts: 312; Member since: Aug 01, 2014

...but if they sell more than one, how is that possible?

30. htcisthebest

Posts: 434; Member since: Nov 15, 2011

Oops. I forgot a "s" after being ;)

24. Swordylove

Posts: 209; Member since: Jun 27, 2015

That's only the components and manufacturing cost. What about marketing, R&D, customer service, maintenance, etc? Same thing goes for Samsung (S7 costs $255, priced $670). This isn't like selling drinks by the street.

27. bassembm

Posts: 143; Member since: Dec 27, 2015

"INNOVATION" in Robbing the fool customers

28. DogeShibe

Posts: 1121; Member since: Jan 10, 2014

Ridiculous.

29. flavius22

Posts: 218; Member since: Aug 23, 2015

They trying to sell pink iphone 5 for a third year for like 400 euros. Its ok to ask though

33. MrElectrifyer

Posts: 3960; Member since: Oct 21, 2014

Talking about costs of parts, here's some insight if anyone's thinking Samsung is just-as much of a ripoff. First off, you get a $100 Gear VR free with the S7: http://www.phonearena.com/news/Americans-warming-up-to-virtual-reality-ready-to-pay-250-for-a-VR-gizmo_id79373 Next, you get a $30 gift for activating and using Samsung Pay: http://www.phonearena.com/news/Use-Samsung-Pay-on-your-Galaxy-S7-or-Galaxy-S7-edge-and-earn-a-30-gift-card_id79211 Add that to the cost of Galaxy S7 components: http://recode.net/2016/03/14/samsungs-galaxy-s7-costs-at-least-255-to-build/ In conjunction with the over $500 worth of Galaxy Gifts you get from Samsung: http://www.phonearena.com/news/Samsung-Galaxy-S6-and-S6-edge-users-can-get-free-content-Galaxy-Gifts-worth-over-500_id68764 http://www.phonearena.com/news/Buy-the-Samsung-Galaxy-S5-and-get-575-in-freebies-from-Samsung-Galaxy-Gifts_id53397 And paying the premium price for the Galaxy S7 is easily justifiable. Whereas you'll be waiting for at least 500 weeks to gain the equivalent of that from apple's weekly 99c giveaways. It's no surprise apple makes the most profit, they blatantly sell you inferior device at a premium...

35. yyzamin

Posts: 379; Member since: Aug 26, 2015

How many Apple users have posted a comment? Maybe 2-3 out of 50? Looks like half are Android users who wish they could afford to buy an Apple product and the rest are hating anything and everything Apple. Even if Apple sold it for $200 the haters would be hating.

37. abdiel

Posts: 7; Member since: Jan 08, 2016

Why every iphone user believes that android users cant afford an iphone? you're retarded, I can afford an iphone but i'm not iDiot to pay for an overpriced phone, we don't like being ripped off

39. zunaidahmed

Posts: 1182; Member since: Dec 24, 2011

Even as an iPhone user, I find your comment stupid. Why would you think they can't afford an iPhone? But I do understand it could be where you live, maybe no subsidized iPhones? Or maybe you are in a third world country would people mostly use cheap Chinese phones? Anyway, you should not think android users don't like iPhone just cause it's expensive (it's actually on the same price range as all android flagships), it's just planely they don't like it. Nothing less nothing more.

36. Doakie

Posts: 2478; Member since: May 06, 2009

HAHAHAHAHAHHAHAHAHAHAHA! iPhone buyers are so retarded.

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