Apple has kept iPhone pricing in place rather than increase it for the iPhone 6, even while offering more storage to users – in fact, the 64GB and 128GB iPhone 6 models purchased either on-contract or off-contract are cheaper than their corresponding predecessor – though it also introduced the more expensive iPhone 6 Plus versions this year. However, Apple appears to be paying a lot more than in previous years to make the handsets, a new Quartz report reveals.
Citing an analysis from Credit Suisse, the publication says the iPhone 6 costs more to make than any preceding model. Apple is paying $350.60 for an iPhone 6 unit and it gets to keep $248.40 in gross profit after receiving $599 on the retail price of $649 (for a 16GB model).
The 41.5% margin is lower than the iPhone 5s and iPhone 5’s. Apple’s 2013 and 2012 handsets cost $273.30 and $293.70 to make, respectively, giving Apple a 45.8% and 49% margin.
The iPhone 6 Plus is even more expensive, but since it’s priced higher than the iPhone 6, Apple is expected to enjoy its highest gross margin profit per unit on the 5.5-inch phablet since the iPhone 4s. At the same time, Apple’s phablet is expected to only be available in limited supply compared to the smaller version.
Driving costs up for the iPhone 6 models are not only the bigger displays, but apparently also the camera, Bluetooth, Wi-Fi and GPS chips. Even so, the iPhone 6 is expected to give Apple its highest iPhone sales in four years in 2015, and increase iPhone average selling prices along with delivering a 14% year-over-year growth in iPhone revenue.
A graph showing Apple’s decreased iPhone profits over the years follows below.