What does it cost to build an iPhone 6?
Recently Apple unveiled its latest iPhone, the iPhone 6 and 6 Plus. This new phone features a bigger screen and the updated iOS 8. These new features also come with a new higher price for consumers with unlocked phones coming in around $600. You may be wondering how much of that $600 price tag actually goes towards manufacturing, parts and how much does it cost Apple to make a complete iPhone 6.
The Apple iPhone has many expensive components inside of it. The most expensive parts being the processor and the touchscreen. While the new iPhone contains expensive components most people don’t feel it contains more than $200 in components. Apple has not yet published every internal component of the latest iPhone, but we do have data from the iPhone 5 for reference. The iPhone 5’s components cost around $160. Because the iPhone 6 has several improvements and the cost of parts has risen, experts put the iPhone 6 at around $200 in parts. This leaves Apple in theory with $400 in profit.
It is important to realize that there is more that goes into a product than simply the components of the product. One major cost of the product that is not being taken into account is the marketing. Apple spends a lot of money on marketing every year for their iPhone. One major marketing cost is that they spend a lot of money each year to do an unveiling. These unveiling conferences give their products a major marketing push, but they do cost a lot of money. On top of that Apple usually rolls out some new commercials right after the unveiling. These commercials can be extremely expensive to produce and air out on popular TV channels around the world. This year they spent a lot of money to have the rock band U2 featured in their commercials and to give away U2’s latest album to every iTunes user. These marketing costs pile up and they inevitably are passed on to the consumer. Marketing costs are one of the biggest reasons why the iPhone costs as much as it does.
Research and Development is another major cost for Apple. It costs a lot of money to design a product. This year Apple developed both an operating system and a new phone and these products cost money to develop. On top of that the iPhone 6 is a major redesign as it features a larger screen and new features. Time and money had to be invested into making sure that the experience remained the same even after the screen size was increased. The cost of researching changes to the product and developing these changes is expensive and is then spread over the cost of each individual iPhone. A major part of the cost of the iPhone 6 is the cost of the Research and Development of the product.
The latest iPhone is extremely expensive for the consumer and it costs considerably less to produce. However developing the technology to make the latest iPhone is expensive and marketing that iPhone so that consumers will buy it is also expensive. These additional costs are passed on to the consumer and help to explain why the latest iPhone is around $600. As the iPhone 6 continues to stay on the market the cost to consumers will go down as the cost of the research and development and production will go down.
Our Guest, Stephanie, is an avid freelance writer for EZ Buys Direct, an online retailer of iPhone 5 Cutest Accessories. Find out more below.
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