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 Rs17,000/-
While it sells at Rs.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 manufacturing cost of the cameras (both front and rear) is Rs.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.
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!