iPhone 7: The Cost Under The Cover

How much did you pay for your last iPhone? Price may vary slightly from country to country but there is this range that Apple always sets for its devices. Let’s take the iPhone 7 as an example. The iPhone 7 is priced at $649 and the Plus version is sold for $769. Are these prices expensive? Apple fans may argue that there are many good reasons on why the iPhone is as expensive as it is. We don’t argue against those reasons because we know that Apple’s iPhone is one of the best mobile phones in the world, however, let’s explore the pricing more closely.

iPhone 7 Teardown – Sourced From IHS Markit

 

In a recent report by The Telegraph, they unveil the real price behind the iPhone 7. Looking at a 32GB iPhone 7, the components inside it are worth $219.80. That’s how much money you would need to create an iPhone 7. This is approximately $430 less than what Apple is pricing it at. So you are actually paying triple the price of what the iPhone is really worth. What is missing from the picture? Well, we also need to consider the time and money invested into production, research, software and other factors that are vital for a product to be created.

To summarize, while the pure price of the product is 3 times cheaper, the product doesn’t build itself. There are factors such as money and time that are poured into the production process and technology research that render the device to become the powerhouse that it is. $649 may be somewhat expensive but by including the process behind it into the picture, this leaves Apple with a reasonable profit price. Before you buy an iPhone 7, we wanted to share this information with you so that you have an understanding of what you are paying for and how is pricing set.