The 64 GB iPhone 6s costs Apple only $234 in components, say analysts

The 64 GB iPhone 6s costs Apple only $234 in components, say analysts

Here we go again. Merrill Lynch, the investment banking enterprise that got acquired by Bank of America during the wild west days of the financial crisis, has tasked its analysts with calculating how much the new iPhone 6s, 3D Touch and all, costs in components alone. You can see the breakdown in the chart above, and it's higher than the usual "s" mid-cycle upgrade, as there are plenty of new things inside, like a fresh camera sensor, or a pressure-sensitive screen layer, as well as a new haptic motor for the 3D Touch feedback tech.

About half of the cost goes to the silicon and cellular radios, such as $25 for the 14nm A9 processor, $20 for the 64 GB of flash memory piece, $36 for the radios, including Qualcomm's LTE modem that allows record band count support, $22 for the sensors such as the fingerprint one, and the list goes on. The screen is also a big chunk in the spending, tucked in the $74 "component" category, while "others", like the aluminum chassis and cabling, go for about $33 per piece. 

All in all, the 64 GB iPhone 6s costs Apple roughly $234 to produce, plus some R&D and distribution costs tacked on, which in the case of Apple are not a big percentage of the whole. The phone retails for $750, and keeps its value more than any other brand, and that margin is all you need to show when someone asks you why Apple is the most profitable company in the world.

Related phones

iPhone 6s
  • Display 4.7" 750 x 1334 pixels
  • Camera 12 MP / 5 MP front
  • Processor Apple A9 APL0898, Dual-core, 1840 MHz
  • Storage 128 GB
  • Battery 1715 mAh(14h 3G talk time)

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84 Comments

1. stanislav

Posts: 136; Member since: Sep 22, 2014

Like every f**king high end phone 200-250$ no exceptiosn.

3. AnTuTu

Posts: 1595; Member since: Oct 14, 2012

It cost Samsung $260 to produce a Galaxy Note 4 last year. http://www.ibtimes.com/samsung-galaxy-note-4-more-expensive-produce-iphone-6-teardown-reveals-1700769 And Note 5 is between $300 - $350 mark. There are always exceptions when it comes to great smartphones. Samsung believes in giving bang for your buck rather than banging your buck like Apple.

6. Ordinary

Posts: 2454; Member since: Apr 23, 2015

I think S6 Edge+ is even more expensive than Note 5 cause of the screen

18. Finalflash

Posts: 4063; Member since: Jul 23, 2013

That with the fact that Samsung makes most of their own components with no middle man taking a cut. So it would cost then probably 400+ if they weren't.

34. neela_akaash

Posts: 1239; Member since: Aug 05, 2014

If that's true... i wonder what is the manufacturing cost of my Redmi 2 Prime which I bought at $93...

48. dazed1

Posts: 787; Member since: Jul 28, 2015

You are a liar, no way you bought Redmi Note 2 prime for 93$, end of story.

55. neela_akaash

Posts: 1239; Member since: Aug 05, 2014

Read properly you idiot. It's Redmi 2 Prime, not Redmi Note 2 Prime. Bought it on launch sale at Amazon for Rs.5950/-(15% Discount for HDFC card holders) on 10th of August. Just Google before you reply....

83. dazed1

Posts: 787; Member since: Jul 28, 2015

And i'm a idiot cause i misread? lol. Pathetic.

68. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

the glass. Yes the curved glass is more expensive vs a flat glass. But it isnt $100 more expensive. Considering I have worked with tempered glass, flat glass is less than $15 costs and curving it likely doubles the cost. The process takes longer which means yeaids are slower which creates costs. So considering the process of the time to first make the glass flat, then heating it up to 800 degree Celsius to bend it in place and then wait for it to cool and set and make sure its a perfect fit and done to spec adds some costs. But the work is still being done by a machine.

20. stanislav

Posts: 136; Member since: Sep 22, 2014

Yey HUGE DIFFERENCE betwen small and big model. The only thing that is more expensive in Note 4/5 is the extreamly bad display with compleatly pointles resolution with huge back crush and uselese "edge" thing. 300+ for note 5 ? Source ? Eveuntuallu 128 model but i doubt even then

22. hound.master

Posts: 1044; Member since: Feb 27, 2015

Extremely bad display so if note 4/5 display is bad what's good an iPhones one don't think so i say it without any doubt that Samsung make best displays in mobile phones.

26. NikkyM

Posts: 5; Member since: Sep 14, 2015

"Bad"? u better read some reviews, it's one of the best, if not best on the market, currently. "pointless"? u are again subjunctive, as it's technology, but not saying good pr bad

31. Ordinary

Posts: 2454; Member since: Apr 23, 2015

It is literally the best.

39. marorun

Posts: 5029; Member since: Mar 30, 2015

Poor Iphone fanboy feel butthurt lol. stanislav why you do think Apple make over 90% of the profit in the industry? because they sell you cheap hardware with super optimized OS on top. As for 16 to 128 gb chip its about 5$ différence thats its cost them. Sure 10 million time 5$ mean a lots so thats why they always selling crappy hardware ( Apple )

75. stanislav

Posts: 136; Member since: Sep 22, 2014

16 gb base model is very cheap trick, true. But its more than obvius that the big proffit difference do not come from 10-20 bucks more or in a lot cases less in components than iPhone. The big profit comes from huge amount of EXPENSIVE phones they sell and that that amount is from one company. Even Samsung sells few tiems less expensive phones, and they have a lot more expanses for producing so many models (a lot more Production Lines). Every single company has its owne R&D, marketing, equipment, logistics, and A LOT other expenses. Some of them wll be exactly the same no matter if you sell 10 or 10 milion phones and the other will cost you less and less per phone with the increasing amout of sales . Read something about fixed cost and variable cost it might help you to get it

61. techloverNYC

Posts: 601; Member since: Nov 20, 2012

For Samsung u have to add in the depreciation value for the phones. Like all Andriod phones, Samsung phones lose their value very fast. Meaning if u were planning to switch ur old phone for a new one, u would won't get as much money back as expected. One thing we have to give credit to Apple is their phone value, iphone has the best resell value in the market. Maybe if Samsung don't make a new phone every 2 weeks, their phone will sell better, idk. When u add in that factor, I believe both phones are giving u what its worth. The Note 5 u mention will probably be on sale soon for $400-500 and the Iphone 6s plus will still sell on retail.

69. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

no you do not. Samsung top phone resale at equal value as an iPhone. You either need to google prices or just be quiet. we arent talking cheap models. we are talking flagships.

80. mrochester

Posts: 947; Member since: Aug 17, 2014

13. rsiders

Posts: 1889; Member since: Nov 17, 2011

Well no other high end offers a base 16gb model with no sd card expansion either. At least everyone else offers at least 32gb and some with the option to expand the memory.

40. marorun

Posts: 5029; Member since: Mar 30, 2015

And they forgot to show us the cost of the 16 gb model too ;)

15. hound.master

Posts: 1044; Member since: Feb 27, 2015

And they say aluminum is more expensive and more premium what's premium or high quality about a less than 33$ chassis?

35. DarkStar286

Posts: 229; Member since: Mar 18, 2014

$33 just for that small amount of aluminium is actually very expensive. I detest Apple, but there's no denying the aluminium they're now using is of the very best quality

41. marorun

Posts: 5029; Member since: Mar 30, 2015

Grade 7000 from China is not very good as everyone who know metal trading will tell you china grade system is not the same as international. Its the same aluminium used for plane but its borderline and far from the best aluminium used for high resistance part.

56. WallStreetWolf

Posts: 289; Member since: Apr 08, 2013

Chinese aluminum comprises of almost half of the industry. It is used in almost every country in the world in one form or another, so knock it off with the grading system garbage. It is has been used by Sikorsky, Boeing, GE, etc. for years in their aircraft applications. It has also been used in high end sport equipment applications, such as bikes, boats, tennis rackets, etc. The phone has been given increased structural rigidity and that is an improvement. You are unnecessarily negative about Apple, so why should anybody take your word for it anyway.

63. techloverNYC

Posts: 601; Member since: Nov 20, 2012

Finally someone with sense, not everything from china is bad. Over half the world is using China made products, not alot of complaints.

70. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

They as in iFans because they are stupid. Fact - Composite materials do cost more than standard metal or plastic options. Poly-carbonate is not a plastic, it is a composite because it is multiple materials together, not just one single chemical base like most plastics. Aluminum on retail is on average roughly $1.60USD per LB. A single block that Apple and most OEM uses is less than one lb in weight. It doesn't costs $33 to make a case. Because I can by enough material to make one single phone shell and the cost and materials are less than $5.00 each. PERIOD. I know this as fact. because I know how much it costs my company to make such What Lynch is looking at is this. If you as a consumer went to a store and could shop for the parts for a phone the above costs is what you would pay at RETAIL. retail costs and manufacturing costs are nowhere near being the same. They are far much less. It likely costs Apple $125 to make one phone based on it costing you 234 to buy all the parts online right now and putting it together yourself. Samsung makes 80% of the parts that go into their phones. The only thing they buy is the actually raw materials and knowing Samsung Electronics they probably buy them from Samsung Industrial which saves them money. The buy the Internal Flash if its UFS 2.0 and the other emmc they make. They also buy the Sony sensor and they also buy the Gorilla Glass, but Samsung has a 5% ownership stake in Corning, so they surely get a significant discount plus Corning gets free advertising plgins when Samsung mentions they use Gorilla Glass by Corning. So even though it may costs you $300 to buy the parts to build a Galaxy Note 5, It probably costs Samsung 1/2 that much to make it. Yes considering they do have more overhead because Samsung has their own factorizes, plus they pay other companies like Foxconn, they have a much larger distribution channel vs Apple, they have more carriers to send product too, their product is available in more countries, more retailers vs Apple...and Samsung Electronics has over 300,000 employee too; that is a considerable amount of overhead which significantly reduces profits because you spend more. All add, Samsung spent just last year allow over $14trillion Won on R&D and they spend almost that much on advertising and spending money on the Unpack events and all that, their profits margin isnt going to be like Apple who does pretty much NONE of that. Considering, my small company is $10M in value per year, Apple spends less than that in 5 years on R&D, because you dont need new R&D to make the same phone 2 or 3 years in a row. All you do is update the parts sparingly.

2. xsoft7

Posts: 27; Member since: Dec 12, 2013

and how about R&D? how about software development>? how about marketing,taxes... a very shallow post

4. ibend

Posts: 6747; Member since: Sep 30, 2014

like any other company doesnt need that cost, lol at least we all know that iPhone have the highest profit margin among smartphone (except limited luxury brand, of course)

8. frydaexiii

Posts: 1476; Member since: Dec 01, 2011

How is using the same design and not even bothering to slim down components so that it remains the same thickness as the previous model considered R&D? And marketing shouldn't factor so much into the cost. I'm not paying an extra $300+ so that they can better sell their phone to other people.

12. bur60

Posts: 981; Member since: Jul 07, 2014

Well, Apple makes 90 cent profit on every dollar they spend. That shows how much money they charge per spent dollar. 90% extra.

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