The iPhone 6s Plus is a priced possession for many, to the extent that the ones who possess it, have to shell out a lot in the form of EMIs and other borrowings. But did you know that the actual cost of manufacturing an iPhone is less than one-third of the selling price?
Surprised? Well, IHS Technology, the world's leading source in research and analysis of technology, did a teardown of the costs that go in the manufacture of an iPhone 6s Plus unit. The findings are summarized below: (all the values are subjected to approximation)
The cost to manufacture an iPhone 6s Plus device, is only ₹17,000/-
While it sells at ₹51,000 which shows a whopping 300% mark-up on the price!
This statistic highlights how the tech giants continue to dominate the premium market.
The cost of the materials that go into making a 16-GB iPhone 6s Plus comes out to be ₹15,800!
This figure rises to ₹17,000, once the manufacturing costs are added.
Here's how the figure adds up:
The new 3D Touch feature in the iPhone 6s Plus, which is basically the screen, costs ₹3,580 and is the most expensive component of the phone!
Utility: The 3D Touch feature allows users to shift between tasks, basis how much pressure is applied on the screen
The manufacturing cost of the cameras (both front and rear) is ₹1,530: the second most expensive component(s)!
Rear: 12 megapixels
Front: 8 megapixels
So where else does Apple play smart?
Apple charges more money for enhanced flash memory, the manufacturing cost of which is as low as ₹25 per gigabyte!
By that calculation, manufacturing a 64 GB iPhone is just ₹1,200 more than manufacturing a 16 GB phone; but users have to pay ₹7,000 more for a 64 GB than for a 16 GB phone.
This indicates that Apple definitely benefits from using cheaper components, in the effort to boost margins!
Also, the iPhone takes about 24 hours to be assembled and the workers are just paid ₹120 an hour. Now that's sad!
This indicates that even the labour costs involved make negligible difference to the sales price!
Furthermore, even if we add expenses like R&D, shipping, licensing, software (iOS), marketing and other tertiary costs; the margin that Apple charges on the sale of a unit is huge!
So it all boils down to the brand value!
Feature Image Source: CNET