The iPhone SE recycled part costs bring a hefty profit margin for Apple17
Well, just the chipset, it seems, as the iPhone SE comes with the newest Apple A13 and slightly more RAM. The rest? Well, the rest is "99% identical" with the iPhone 8, as the first teardowns show. The team from iFixit took the iPhone SE apart, too, and even told us which iPhone SE parts can be swapped with iPhone 8 ones.
- iPhone 13 release date, price, features, and specs
In essence, the chop shops confirm that the iPhone SE 2020 is an wolf in sheep's clothing, holding mighty power under its inconspicuous iPhone 8 exterior and modest pricing. The sheer fact, however, that the iPhone SE 2020 is 99% iPhone 8 means that Apple may have managed to keep a larger profit margin on the handset that it does with the iPhone 11 family, and now the first bill of materials has appeared to show exactly that.
Apple iPhone SE (2020) parts price
The teardown part analysis juxtaposes the cost to make an iPhone SE (2020) against the iPhone 8 for its launch time, and found that the sum total of the parts is now 18% lower, despite the newer chipset. The Japanese from Fomalhaut that did the BOM estimate pegged the components pricing of the iPhone SE (2020) to be just $217.
Apple iPhone SE 2020 vs iPhone 8 interchangeable repair parts:
- Display assembly
- SIM tray
- Taptic Engine
Unfortunately, Apple swapped just enough stuff around that you can't use, say, an iPhone 8 replacement battery as a bolt-on directly, as the connectors are slightly different, or the home button.
The LTE antennas inside differ as well, and perhaps the camera packaging, though they look like identical parts. The thing most likely to break, though - the 4.7" Retina display - is interchangeable between the two phones, so repairs would come very cheap.
You wouldn't want to swap that directly, though, as you'd lose the individual True Tone calibrations. Sorry, you won't gain 3D Touch if you do it, either. The moral of the story? Despite its rock bottom for Apple's standards pricing of $399, the iPhone SE (2020) commands quite a hefty margin for Apple, as it didn't spend much on R&D, and is mainly using repurposed older parts for it.
It does, however, fill an existing market niche mixture of nostalgic iPhone owners and compact phone lovers that will have a futureproof munchkin for at least the next two years. Those 5G phones may be all the rage now, but there is barely network support, and Apple will be laughing all the way to the bank considering that the iPhone SE 2020 costs next to nothing to put together in parts, and its margins are likely in the 200-300 percentage points.
Besides the bill-of-materials profits, Apple will be vastly expanding its market share across the globe in times when phone sales take a nosedive due to the coronavirus pandemic. With that market share comes immense increase in access to its subscription services, too.
By giving subscriptions away with new phones, Apple is preparing the field like a dealer preps his clients. Once you are hooked up to a bunch of these services, and after the gratis subscription period expires, you will start to get charged automatically, and, at prices like $5 or $10 a pop, might not even bother to ruin your high scores, playlists, or mid-season binges. Thus, the cheapo iPhone SE 2020 whose processor will keep it relevant for years, is the perfect gateway drug to Apple's ballooning ecosystem of subscription services in multimedia.