Teardown; IHS scans iPhone 6 Plus, estimates $15.50 higher build cost

September 25, 2014 // By Graham Prophet
According to analysts IHS, Apple’s iPhone 6 Plus is $100 costlier for consumers to buy, but costs just $15.50 more for Apple to make: these findings come in an IHS report, “Teardown – Apple iPhone 6”

For consumers opting to buy Apple Inc.'s iPhone 6 Plus rather than the iPhone 6, the additional 0.8 inches of screen size will cost $100 extra. However, for Apple, the iPhone 6 Plus costs only about $16 more to produce, delivering to the company an even heftier margin than normal for its smartphone line, IHS concludes.

The bill of materials (BOM) of the iPhone 6 equipped with 16 GByte of NAND flash memory amounts to $196.10, according to a preliminary estimate by the Teardown Mobile Handsets Intelligence Service at IHS Technology. The cost of production rises to $200.10 when the $4.00 manufacturing expense is added.

The BOM of the iPhone 6 Plus amounts to $211.10, and rises to $215.60 with the additional $4.50 manufacturing cost added. This is only $15.50 higher than the total for the iPhone 6.

“Apple has always been adept at offering higher-end iPhone models with enhanced, desirable features—and then pricing those versions for maximum profitability,” said Andrew Rassweiler, senior director, cost benchmarking services for IHS. “In the past, the premium versions of iPhone offered higher memory configurations for additional profit. While Apple continues this memory strategy, the company is also taking a similar approach with the iPhone Plus, structuring its pricing to add bottom-line profit on models that have a very desirable feature: a large phablet-sized display.”

With a contract from a wireless operator, the 16GByte version of the iPhone 6 is priced in the USA at $200, while the Plus model comes in at $300. The unsubsidised pricing for the two phones is $649 and $749, respectively.

The table presents the preliminary BOM and manufacturing cost estimate of the Phone 6 and iPhone 6 Plus. IHS cautions that its teardown assessments, “are preliminary in nature, account only for hardware and manufacturing costs, and do not include other expenses such as software, licensing, royalties or R&D”.

The most obvious difference between the two new Apple smartphone