Most people who buy iPhones are unlikely to worry about its price because all of Apple’s products are more of a fashion and lifestyle statement than anything else. Of course the build quality of iPhone is superior and there are some advanced features and functionalities, but such things are available in other cheaper smartphones too. The fact that iPhones are priced higher than most other smartphones in the same category makes us wonder, as to what could be the actual cost of manufacturing an iPhone. Here are some interesting facts that you might find useful.
Actual Cost of iPhone 6
According to a report published by leading research firm IHS, the actual cost of manufacturing a 16 GB iPhone 6 is around $200. The iPhone 6 was launched at a price of $649, which means a profit of $449 for every iPhone sold. This translates into a whopping profit margin of about 69 percent. Even if we consider other expenses and overheads such as software, shipping, licensing, R&D, advertising and marketing, retailer’s commission, etc., then also the profit margin would be huge at around 40 percent. The iPhone 6 Plus costs an additional $100 and yet it has just around $16 of additional components. The profit margin for iPhone 6 Plus is even higher at around 71 percent.
Actual Cost of iPhone 7
The 32 GB iPhone 7 was launched at around the same price as its predecessor iPhone 6. However, the cost of manufacturing an iPhone 7 was more than that of iPhone 6. The actual cost of manufacturing an iPhone 7 was $219.80 at the time of its launch. If we add the cost of assembling, the final cost comes around $224.80. At this rate, iPhone 7 is costly to manufacture, as compared to iPhone 6. However, the profit margin is still quite huge at around 65 percent.
Actual Cost of iPhone 8
The actual cost of manufacturing a 64 GB iPhone 8 is around $247.51. This version of iPhone is priced at $699, which gives a profit of $451 on every iPhone 8. This translates into a profit margin of around 64.5 percent. If we look at the 64 GB iPhone 8 Plus, it is priced at $799 and its cost of manufacturing is $295.44. This gives a profit of $503 on every iPhone 8 Plus and translates into a profit margin of around 63 percent.
Actual Cost of iPhone X
The iPhone X is the latest offering from Apple and it has created quite a buzz in the industry and among iPhone fans. The 64 GB iPhone X is priced at $999 and its cost of manufacturing is $370. That means a profit of $629 on every unit sold and a profit margin of around 63 percent.
Are the high prices justified?
As with any other lifestyle product, it’s the consumers who decide how much are they willing to pay. The cost of manufacturing is hardly a criterion when it comes to taking a decision about buying an iPhone. Moreover, iPhones have superior quality, unique features and functionalities and advanced security. If you are concerned about paying a huge premium, then iPhones are certainly not for you. However, if you are looking to make a fashion and lifestyle statement, an iPhone can certainly help create the right impressions.