Apple spends $236 to make each iPhone 6s Plus device, which it sells for over three times that value at $749—a 217.4 percent markup that highlights the tech giant’s ability to dominate the premium market while other smartphone makers struggle.
The bill for materials for a 16-gigabyte iPhone 6s Plus comes in at $231.50, which rises to $236 once manufacturing costs are added, according to IHS. The iPhone 6s Plus costs just $16 more to make than the last year’s model, with Apple benefiting from cheaper components to boost margins.
3D Touch, upgraded cameras
One of the biggest additions to the new iPhone is the so-called 3-D Touch feature, which allows users to carry out different tasks depending on how much pressure they put on the screen.
IHS said the screen costs $52.50, making it the most expensive compenent of the 6s Plus.
Apple has also upgraded its main camera to 12 megapixels in the iPhone 6 and 6 Plus from 8 megapixels in the previous versions. The front-facing camera has also been upgraded. IHS said the cameras cost $22.50 on each device.
IHS noted that the decreasing cost of many iPhone components was helping Apple’s profitability. A 16 GB now costs Apple only $5.50 per unit, but the sale price difference between a 16 GB and 64 GB model was steep, IHS noted.
“Flash is now so cheap it’s almost irrelevant, but Apple monetizes this difference with consumers, to the tune of $100 for each additional step-up in memory capacity,” Andrew Rassweiler, senior director of cost benchmarking services for IHS Technology, said in a news release.
“For example, a 64 GB iPhone now costs Apple about $17 more to make than a 16 GB iPhone, but Apple charges iPhone buyers $100 more for the increased memory. This is part of Apple’s ongoing strategy to improve profits by selling a product mix that is heavier in the higher-end iPhones.”
Apple sold a record 13 million iPhones 6s and 6s Plus units three days after their launch, the company said on Monday, more than any previous first weekend sales results.