How Much Does It Cost Apple To Build An iPhone 6S?

The new iPhone 6s costs somewhere between $200 to $300 more than its corresponding iPhone 6 model, but how much of that is due to increased cost on Apple's end? The new model adds features like 3D Touch, upgraded case materials and better cameras that are bound to add to the cost -- though some hardware like NAND memory only continues to get cheaper to manufacture. A new estimate from IHS Inc. suggests that a single iPhone 6s Plus costs Apple $16 more to make than the previous iPhone 6 Plus did -- but does this justify the hike in price?

The materials for a new 16GB iPhone 6s Plus currently set Apple back $231.50, and when combined with manufacturing costs the total comes to $236. If this is $16 more than the iPhone 6 Plus' cost, as IHS claims, then that means that the iPhone 6s and 6s Plus come with a slightly higher retail price to material cost ratio. IHS's teardown analysis implies that the increase in material costs has also led to an increase in the phone's durability and re-sale value, however -- so that extra few hundred dollars could be worth it in the end.

So where does the extra cost in the new iPhone go, exactly? “3D Touch and Apple’s Taptic engine are among the more notable feature upgrades found in this latest round of iPhones,” said Andrew Rassweiler, senior director of cost benchmarking services for IHS Technology. “With each generation the company makes measured, incremental technology improvements to its iPhone line, and this time around those changes are increasing Apple’s per-unit material cost.”

The upgrade may be worthwhile for those toting cracked screens on their current iPhones, as both 6s phones are designed to be stronger and more durable. The aluminium case is harder than that of the last model, and the 6s has seen an upgrade to the latest Gorilla Glass 4 screen. The core processor has also been upgraded from Apple's A8 series to A9, with Apple claiming 70 percent faster performance than the iPhone 6's processor. A whole $10 of the $16 cost increase can be attributed to the new Taptic Engine and 3D Touch feature.

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A 16 GB flash memory now costs Apple less than $6 per unit, which is potentially even greater reason for you not to buy the 16GB model. In fact, NAND flash memory is becoming so cheap that this is where Apple makes much of its profits. “For example, a 64 GB iPhone now costs Apple about $17 more to make than a 16 GB iPhone, but Apple charges iPhone buyers $100 more for the increased memory," says Rassweiler. Other upgrades include the inclusion of a 12 megapixel main camera instead of 8, and an upgrade on the front camera from 1.2 MP to 5 MP. The battery in the iPhone 6s Plus is actually smaller than in the iPhone 6 Plus, so most of the improvement in battery life instead comes from power-saving software features and power-management components in the phone that drain less energy.

[IHS]