iPhone 7 manufacturing cost is more than iPhone 6S: IHS Markit

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Apple has more or less retained the design of iPhone 6S with the latest iPhone 7 and iPhone 7 Plus, while they look alike from the outside there’s little that’s quite similar in the insides of the two phones. After adding a few parts here removing a few there, Apple seemingly has spent more making the iPhone 7 than it did with iPhone 6S. According to a teardown report released by IHS Markit, Apple’s cost may have risen due to a bigger battery, larger internal storage and some other hardware changes in the iPhone 7.

Including $5 in basic manufacturing costs, total cost to manufacture the iPhone 7 mobile rises to $224.80, $36.89 higher than the business research provider’s estimates for the iPhone 6S.

Also read: iPhone 7, iPhone 7 Plus buyers battle bugs: 5 problems early users are facing

Apple retails an unsubsidized 32GB iPhone 7 at $649.

The company unveiled the iPhone 7 with high-resolution cameras and no headphone jack at its annual launch on Sept. 7.

IHS Markit also said on Tuesday the iPhone 7’s Bill Of Materials (BOM), a financial estimate of the raw materials used, was “in line” with flagship smartphones made by rival Samsung Electronics but Apple ekes out better margins.

“Total BOM costs for the iPhone 7 are more in line with what we have seen in teardowns of recent flagship phones from Apple’s main competitor, Samsung, in that the costs are higher than in previous iPhone teardown analyses,” said Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit.

Also read: iPhone 7 has the best smartphone display ever, sets new records: DisplayMate

“All other things being equal, Apple still makes more margin from hardware than Samsung, but materials costs are higher than in the past.”

IHS Markit has not yet performed a teardown analysis on the larger iPhone 7 Plus.

Supplies of Apple’s iPhone 7 Plus have been exhausted in all shades, and the smaller iPhone 7 has also sold out in the new jet black color, the company said last week.

Yet, in some markets, such as China, interest in the new phone has been muted, as cheaper local brands amp up their design and marketing. India, a big market for Apple as said by CEO Tim Cook, is yet to taste the new Apple. The company will launch the two phones in the country on Oct 7. Starting price for the iPhone 7 has been set at Rs 60,000 and the iPhone 7 Plus will sell for Rs 72,000 for the 32GB base model.

Also read: iPhone 7, iPhone 7 Plus full prices for India revealed, up to Rs 22,000 price cut on other iPhones

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