The Price Of An iPhone Is Nearly Three Times Its Production Cost

If you have been in the market for an iPhone at any point in time that Apple churned out a new phone, you will know that the prices can be on the high side. Most Apple lovers do not, however, mind too much considering the superior design and innovation that the Apple iPhone has built a reputation for.

Apple’s latest iPhone release, the iPhone 7, at its cheapest retail price will go for $649 currently. New research suggests that it costs Apple roughly $225 to build one, meaning that the company tagged a price-tag that is three times the production cost of the phone on it.

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The market research firm IHS Markit recently took apart the iPhone 7 to price out all of the individual parts that go into building the Apple iPhone. The market research firm’s analysis showed that the parts likely cost Apple about $220 to purchase, and about $5 to assemble.

apple iPhone

Turns out the price of production of the iPhone 7 is far more than the last iPhone model. This means that although the iPhone 7 looks a lot like its predecessor the 6S, there were a few costly technological enhancements on the inside.

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Some of this costly technological enhancements include; a brighter, deeper display, a new haptic engine that provides a range of buzzes and taps when you get notifications, and a storage upgrade from 16 GB to 32 GB. Although Apple has not yet confirmed the IHS Markit’s cost estimates, here is a diagram that gives the cost estimates of all the iPhones ever produced:

apple iPhone


According to the analysis, the iPhone 6S Plus is currently the most expensive iPhone Apple has ever built, although the IHS has not yet taken apart the iPhone 7 Plus. The iPhone 7 is the most expensive flagship phone the company has produced, surprisingly costing slightly more than even the original Apple iPhone from 2007. It is surprising because Apple produced the first iPhone at a time when the average smartphones were giant contraptions complete with buttons and antennae.

apple iPhone


To be fair to what may be seen as Apple’s unfair pricing, the parts, and labor are not the only costs that go into the total cost of making the iPhone. A total cost analysis would have to include research and development, marketing, shipping, and packaging, to name a few.