5 iPhone Profit Margin
The iPhone is certainly not a cheap device. Its price tags tend to err on the side of premium in the modern smartphone market and Apple is a frequent target of criticism that its devices are overpriced relative to the amount of tech that you get. But how much does it cost Apple to actually build an iPhone, and do the components and craftsmanship actually justify its higher price tag?
Well, according to a breakdown report by analytics firm IHS Markit, materials and components in the iPhone 7 cost about $219.80. As for assembly costs, they run the company about $5 a device (more on the assembly lines later). That’s about $225 to build a device that retailed for $649 at launch. Of course, that price doesn’t account for Apple’s research & development, marketing and other costs. And there’s evidence to suggest that Apple’s margins are slimming a bit on newer devices. But still, the company pockets about $424 on each device, roughly. Whether or not that’s fair is certainly up for debate.