Apple could be shelling out $160 to make each 16GB iPhone SE according to an initial estimate calculated by research firm IHS.
Looking at the entry-level iPhone SE 16GB, the firm broke down the potential cost of each of the various components.
The 4-inch display, built by LG Display costs $18 to build which is less than half the $41 it cost when Apple used it on the iPhone 5s in 2013.The cellular chips, built by Qualcomm costs $15 while the Apple built A9 processor costs $22.The processor is built by two companies: South Korea’s Samsung and Taiwan Semiconductor Manufacturing Corp.
Apple iPhone SE with 16GB of built-in memory costs $160 to build in parts and labor while a 64GB model requires $170 to put together.IHS estimates that Apple makes approximately $89 in incremental profit for each iPhone SE 64GB sold when compared with the iPhone SE 16GB.
IHS analyst Andrew Rassweiler, who supervised the teardown said,
The potential profit margin on the 16-gig phone is lower than it is on the 64-gig version.Apple is selling the phone with the higher storage for $100 more but only about $10 in additional cost.
The iPhone SE represents an amalgamation of three iPhone generations — iPhone 5s, iPhone 6 and iPhone 6s — rolled into something altogether new.Despite its physical resemblance to the iPhone 5s, the resulting product is far superior. In fact, the only significant tradeoffs a consumer would make with the iPhone SE against the iPhone 6s is smaller size and lower screen resolution.
The 16GB iPhone SE sells for $399 without a contract. The 32GB model costs $499 while the 64GB version is going for $399.