It’s important to preface this entire piece by saying that Apple CEO Tim Cook once said that these types of estimates are never ‘anywhere close to being accurate,’ and that they are typically ‘much different than the reality.’
That said, the iPhone 7 is more expensive to manufacture than last year’s 6s — headphone jack be damned.
The total cost of the build, according to data from IHS Markit, adds up to $219.80. Once you factor in labor costs, estimated at $5 per phone, the total build runs $224.80 for the base model, 32GB iPhone 7. The company claims that this is an increase of $36.89 per unit, as opposed to the $187.91 iPhone 6s base model from last year.
With the base model phone running $649, this gives Apple an expected profit of $424 for each device sold, a 189 percent markup. Of course, this doesn’t factor in outside costs, like research and development, marketing or events.
All told, per-device profit is probably much lower than the $424 estimate and these estimates could be wildly inaccurate anyway. But, it’s always fun to peek through the looking glass.
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