If you’ve been wondering what the production cost for the recently released iPhone 7 is, search no further – thanks to the analysts at IHS Markit, we now have the figures.
According to IHS, the total cost for a 32GB iPhone 7 totals up to $224.80 USD after bill of materials ($219.80 USD) and basic manufacturing costs ($5), which is $36.89 USD higher than the iPhone 6S’ analyzed cost back in December 2015. This brings the total production cost of the iPhone 7 closer to the flagship phones from its primary competitor, Samsung.
While the overall shape and physical design of the iPhone 7 is similar to the iPhone 6S that preceded it, the new display has wider color gamut which improves the rendering of photos and videos – leading to increase costs. It’s also become more clear now that Apple eliminated the 3.5 millimeter headphone jack in part to allow a larger battery and haptic motor as well as a waterproof microphone.
Furthermore, Apple increased the iPhone 7’s storage density, with the base model now boasting 32 GB. From a cost perspective, the shift from 16GB/64GB/128GB iPhones to 32GB/128GB/256GB is a big reason why Apple’s cost to build the iPhone 7 saw a remarkable jump,so Apple makes an estimated profit of $424 on each unit it sells (This is based on the cost of making each iPhone 7 and excludes the research, development, or marketing costs).