iPhone SE may be Apple’s most affordable iPhone ever at just $399 off-contract, but the Cupertino company is still making a very nice profit on it. According to a new report, the device costs an estimated $160 to build with 16GB of storage.
Research firm IHS conducted a teardown analysis of Apple’s latest iPhone, which made its debut last Thursday. Its most expensive parts include the A9 processor, which costs Apple around $22, and the cellular chips made by Qualcomm, which cost around $15.
The display, which is manufactured by LG, is also a somewhat pricey component at $20. However, that price has fallen significantly since Apple first started using this display for iPhone 5s back in 2013, when it cost around $41.
Upgrading the iPhone SE’s storage from just 16GB to 64GB costs Apple a measly $10. That makes the $100 price different between these models look even steeper for consumers, many of whom will opt for the more expensive option to store more apps, images, and videos.
It’s worth remembering that the total build cost estimated by IHS is for the components only. But there are lots of other things that go into making a smartphone, like design, marketing, labor costs, packaging, shipping, and lots more.
Apple isn’t making $239 on every 16GB iPhone SE it sells, then, but it probably isn’t too far off that. Its decision to stick with the iPhone 5s’s form factor — and use many of its components — will have saved it a whole lot of money in design and development.