According to an initial estimate calculated by research firm IHS, and reported by teardown, the components and manufacturing cost of a 16 GB iPhone 6 cost Apple $200.10.
This is slightly higher than the iPhone 5 which reportedly cost Apple $167.50 to produce. iPhone 6 16 GB model currently sells for $649 in the U.S. without a contract.
That gives Apple a huge profit margin of about 69% on the iPhone 6 and 71% profit margin on the iPhone 6 plus, which costs $100 more, but according to IHS, Apple is spending only $15.50 extra to produce the senior cousin of the iPhone 6.
The touchscreen appears to be the most expensive manufacturing component of the iPhone 6 and iPhone 6 plus which costs $45 and $52.50 respectively. The more expensive camera on the iPhone 6 plus which features optical image stabilization brings in an extra cost of $12.50 as against $11 on the iPhone 6.
Apple has been known to break-even on it products, a feat other companies like Sony, currently in red, find very elusive. We can’t tell exactly what Apple makes on every iPhone 6 and iPhone 6 plus sold. This is because Apple also spends huge amount of money on licensing, software development, research and development, packaging, shipping and marketing. Whatever these add up, Apple’s margins are still very huge.
A lot of users are not aware of the true retail cost of the iPhone because they come with unimaginable discounts over two-years of a signed contract with a wireless carrier in the U.S. You can get an iPhone 6 for as low as $199 with a contract, and there have also been reports of carriers giving out the iPhone 6 for free, solely based on contract.
In Nigeria where such things as “contracts” do not happen, users who want the latest Apple flagship devices have to pay through their nose, before it becomes a reality.