An analysis of the new iPhone 6, which retails without a contract for $649, reveals that the small, 16 GB model costs around $200 to manufacture, according to a report over on Re/code.
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The teardown was performed by market researchers at IHS and places the manufacturing costs for each new iPhone model to be somewhere around 30 percent of their final retail price, netting Apple a healthy profit on each device sold. Of course, these aren't pure profits, as research, development and marketing costs still have to be recouped. Still, tripling their money on every phone is a pretty good deal for Apple.
The profits only get higher as the storage size increases. The full 128 GB iPhone 6 only costs Apple $247, a scant $47 more than the base 16 GB model. The increase in retail price from the base model to the largest one, however, is $200.
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The profit margin for the iPhone 6 Plus is even more impressive. According to the report, a 16 GB iPhone 6 Plus costs $216 to manufacture, and it retails for $749. Once you get to the 128 GB model, however, the retail cost goes up to $949, just barely remaining in three digits, while the manufacturing costs stay comparatively low at $263. This deal provides Apple with its largest profit margin at 72.3 percent, meaning the company makes almost four times its manufacturing costs back on every 128 GB iPhone 6 Plus.
Increasing the size or storage capacity on an iPhone 6 seems to cost Apple around $20, though each upgrade comes at a retail cost increase of $100. High profit margins are not exactly a rare thing in electronics. When you think about all of the research time and man-hours behind a new gadget, the true cost of an iPhone is much more than its parts and labor. It's always interesting to see, though, how much these new devices are worth independent of everything else.
