Apple iPhone 7 Costs $225 to Manufacture, while Retailing at $695 in the US

by Teja Chedalla 9

Apple launched the iPhone 7 and iPhone 7 Plus smartphones at the Special Launch Event held on September 7th in San Francisco. Both the devices came with decent upgrades compared to the last year’s iPhone 6S and 6S Plus. Unlike the earlier launches, 2016 iPhones came with different cameras on the rear. While the iPhone 7 Plus came with dual 12MP rear cameras, the iPhone 7 is limited to just one 12MP sensor.

Though there are certain upgrades, the company priced both the iPhone 7 and iPhone 7 Plus same as their predecessors. Now we got the estimated bill of material (BOM) details of the iPhone 7 32GB storage variant from IHS. The same device is selling for $649 in the U.S which is usually cheaper than the Indian pricing which is said to be launched at Rs. 60,000 ($895). This time, there are no official first-week sale numbers but few reports suggest the sales of the new iPhone 7 to be on par with the iPhone 6S sales.

Adding the $5 manufacturing cost per handset, the device is said to cost $224.8 for Apple. All new Apple A10 Fusion chipset which powers the new iPhones is priced at $26.90. It is manufactured by TSMC on a 16nm FinFET process. Whereas the basebands, RF transceiver, antenna module and other network chips are said to cost $33.90. Just like the earlier iPhones, the 4.7-inch display priced at $43 is the costliest component in the new iPhone 7.

apple-bom-cost

The 1960mAh battery of the iPhone 7 which is slightly bigger than the 1715mAh battery on its predecessor cost only $2.50 for the company. The Samsung’s 2GB RAM and SK Hynix’s 32GB internal storage will combinedly cost $16.40. Both the 12MP OIS rear camera and the 7MP FaceTime camera, which are the biggest upgrades will be adding $19.90 to the bill. New stereo speakers along with the taptic engine, antennas, connectors, and microphones are mentioned to cost $16.70.

The rest of the hardware like sensor, Cirrus Logic amplifier, barometer, accelerometer, gyroscope, NFC are estimated to cost $14. This is all about the device and the hardware inside, now the accessories included in the box like 5W USB power adapter, Lightning cable, Lightning to 3.5mm audio adapter, and Lightning EarPods will combinedly cost $11.80. The Bluetooth, WLAN, GNSS and their respective module costs another $8. A $1.3 Lattice ice40 semiconductor is also present on the iPhone 7.

The Aluminum body, speaker and lighting port vents, physical buttons add $18.20 and the power management diodes will be costing $7.20. Adding all these, the device is estimated to cost $225 while the company sells more than 3X times at $695. On the other hand, iPhone 7 is the costliest smartphone for the company to manufacture, at least according to IHS. Also, check out the worldwide pricing of the iPhone 7 to known in which the countries the device will be costlier.

Stay tuned on Phone Radar for the details of iPhone 7 Plus’s bill of material!

Teja Chedalla

A Mechanical Engineer who loves cricket and is passionate about traveling. Here at PhoneRadar, he covers exclusive news around gadgets & technology by digging deep into the Internet. You can connect with him on all the social platforms @t4teja.

  • Bhanu uday

    come on phone radar your are more than this! How can they earn so much without considering research and developments, salaries, promotion, import duties, showroom maintenance, distribution network, and many other things.

    • Of course Bhanu. This is why we have made a change in the title where instead of earning we now just mention the costs.

  • Karthik

    Even if we add $100 more, it’s still twice the amount they put in! Huge margin it is!!

  • R&D, sales promos, after sales service etc etc also play a major role in the pricing of a product.

    • Yes they do. These are just the costs which are useful to someone who needs to get replacements of some specific hardware & needs to know the official costs.

      • Yup, you have a point in that! ?
        But generally Apple doesn’t replace individual parts are per my experience.

        My sister is using iPhone 5 from past 3 years and last year it’s front camera started collecting dust. When i showed it at the service center, they told me that we can’t clear the dust from the front camera but instead we can offer you an exchange. By paying ₹22,000/- you will get a new iPhone 5.

        I mean how ridiculous it is… Just for cleaning the dust i have to spend ₹22k. At the end i had to get it cleaned from a local mobile shop.

        What are your thoughts on this?

        • This is not what I was referring to. I have seen many cases of broken displays and users change it manually by watching DIY videos on YouTube. This way atleast this could give them some information.

          • I got your point and what you were referring to… 🙂

            The other part was about sharing my experience that i had at the apple service center and i asked your thoughts on that….

  • If we compare with a Note 7, then we’d get a clear picture of the benefit margin!
    Is there any such info on Note 7 or any similar flagship device?!