Sure, component costs are an inaccurate way of determining a product’s real value, but nevertheless, they’re pretty interesting.
We can’t deny that Apple puts premium prices on its products: the newly-released entry level iPhone 6s 16 GB is priced at a whopping $649. However, the smart phone isn’t priced at the sum of all its parts, as some groups who tore it down found out.
So, what is the component cost of Apple’s newest flagship smart phone? Let’s take a look at some facts and figures.
Component Costs
Every time a new high-profile and expensive product is released, someone is going to tear it down. These tear-downs really explain well why Apple competitors are able to price their phones at a lower price – but before you get the pitchforks out, I recommend that you read the whole story.
According to iFixit, the overall component cost of the iPhone 6s 16 GB is at $236, including assembly and insertion costs. Meanwhile, Teardown.com prices it at a slightly higher $245 and IHS values it as $211, though it has yet to tear one down (they only managed to check on the iPhone 6s Plus)
Comparing it to the iPhone 6
Unsurprisingly, the iPhone 6s is priced higher compared to its predecessor. The biggest factor is the new 3D Touch feature and the associated taptic engine, which increases the component cost by $10. Other notable comparison highlights include:
- The redesigning of the aluminum shell. The iPhone 6s uses the aluminum 7000 series, which is highly resistant to “bendgate”, an issue that hounded its predecessors.
- The better cameras. The iPhone 6s sports 12 MP rear and 5 MP cameras, which are both upgrades and have considerably higher resolutions when compared to the iPhone 6.
- New, powerful processors: the iPhone 6s sports an A9 and M9 chipset, while the iPhone 6 only has the A8 and M8.
- Smaller batteries. The iPhone 6s sports smaller batteries compared to its predecessor, due to it needing more space for its new sensors which provides the 3D Touch feature. However, battery life is relatively unaffected.
Most expensive components
The IHS notes that the iPhone 6s’ most expensive parts include the following:
- The display touchscreen, which costs $52.50. The resolution is 1920 x 1080, is 5.5 inches, and supports Apple’s newest groundbreaking feature, called the 3D Touch.
- The A9 apps processor, which is priced at $22.
- The 2 GB RAM, which is at $17.
- The $22 cameras
With the cat out of the bag, is the iPhone 6s’ price justified?
Based on components alone, no.
The component cost has failed to take other factors into consideration, though, like the software, design, research, planning, licenses, and even tax considerations. If you include the hours and money spent in designing the software (applications, UI, every system function) the component cost would rise considerably. Note that only the individual parts are priced, not the labor and everything that comes with it.
The most glaring stat however, is the $17 difference between the 64 GB variant and the 16 GB one. Note that there is a $100 difference between them in the market.
Apple CEO Tim Cook blasted the the component cost teardowns, exclaiming that he has never seen one close to being accurate. But still, Mr. Cook, how do you explain the marginal difference in actual cost for flash memory? Storage is one of the cheaper components that’s in a phone now, so I would say that while the 16 GB model’s starting price might be justified, I really would have to challenge the value of the other SKUs. What are your thoughts, folks? Would love to read your impressions in the comments and take the discussion further.
