iPhone SE Component Costs Estimated to Start at $160

Component costs for the new 16GB iPhone SE are estimated to be at about $160, according to a preliminary teardown report from IHS iSuppli. When a new iPhone is released, IHS often takes it apart to estimate the cost of each component to ultimately predict how much Apple spends on hardware.

IHS estimates that the materials for the device cost $156.20, rounded up to $160 with the addition of manufacturing costs. Apple is believed to have kept the base cost of the iPhone SE relatively low by using a number of parts designed for the iPhone 5s, 6, and 6s, allowing the device to be sold to consumers at a $399 starting price due to price drops on the original components.

ihsexplodediphonese
For example, the Gorilla Glass display in the iPhone SE is estimated to be one of the most expensive components, coming in at a price of $20. When that display was originally used in the iPhone 5s, it was more than twice as expensive. When the iPhone 5s was released in 2013, in fact, its costs were estimated to be at $199 and with Apple's most recent flagship iPhone 6s Plus, component costs were estimated to start at $236.

When it comes to the 64GB iPhone SE, IHS estimates that Apple is making an additional $89 per device over the 16GB iPhone SE, due to the relatively low cost of memory upgrades.

"Apple is willing to drop its gross margin on the low end to induce sales -- though it is likely counting on many consumers upgrading to the more profitable 64 gigabyte SE model," said Wayne Lam, principal analyst, mobile devices and networks, IHS Technology. "When the profit machine that is Apple capitulates to the market forces of a maturing industry, it shows its tacit acknowledgement that even it is not immune to the dynamics of the global smartphone slowdown."

IHS' component cost estimates look at the potential price related to each individual component in a device without taking into account other expenses related to product creation like research and development, advertising, software, and distribution, so while interesting, the estimates are not a useful tool for determining Apple's actual profit margin. An earlier report from CNN suggested the iPhone SE components have a total cost of $220, but IHS has a longer history and more experience with component pricing estimates.

In the past, Apple CEO Tim Cook said that component cost breakdowns on Apple products are inaccurate. "There are cost breakdowns around our products that are much different than the reality," he said. "I've never seen one that is anywhere close to being accurate."

Related Roundup: iPhone SE 2020
Buyer's Guide: iPhone SE (Buy Now)

Top Rated Comments

(View all)
Avatar
57 months ago
Bottled water components cost $0. They sell it for $1.59.

Component costs never tell the true story.
Score: 34 Votes (Like | Disagree)
Avatar
57 months ago

And then you have Jony's big bonus to think about :D

Oddly, that's the one thing he won't like to be thinner! :p
Score: 20 Votes (Like | Disagree)
Avatar
57 months ago

Bottled water components cost $0. They sell it for $1.59.

Component costs never tell the true story.

Agreed. The cost of the OS and software need to be include. Plus shipping. Plus advertising. And then you have Jony's big bonus to think about :D
Score: 13 Votes (Like | Disagree)
Avatar
57 months ago
Why are so many people upset when these estimates come out?
Score: 8 Votes (Like | Disagree)
Avatar
57 months ago


In the past, Apple CEO Tim Cook said that component cost breakdowns ('https://www.macrumors.com/2015/04/27/apple-product-component-cost-breakdowns-inaccurate/') on Apple products are inaccurate..."I've never seen one that is anywhere close to being accurate."

Probably a little bit of grandstanding with that statement. Of course we can't know exact details of Apple's contracts, but supply chain analysis is neither new nor rocket science. They're not posting the highest profitability of any company on earth on grocery store margins. ;)
Score: 6 Votes (Like | Disagree)
Avatar
57 months ago
When people complain about component costs compared to the actual product, it reminds me of on Pawn Stars when they bring in an expert to say what something's worth, then they offer half of that. Like people expect them to buy and sell stuff without making a profit.
Score: 5 Votes (Like | Disagree)

Top Stories

Apple-Acquired Dark Sky Officially Shuts Down Android App

Saturday August 1, 2020 3:43 pm PDT by
Apple in March purchased weather app Dark Sky, and at that time, Dark Sky's developers said that the app's Android version would be discontinued on July 1, 2020. However, instead of shuttering the app on that date, the app's developers announced that the discontinuation would be delayed for another month. Now that it's August, Android users are no longer able to access the app, and...

Apple May Launch This Year's 'iPhone 12' Lineup in Two Stages, With 6.1-inch Models Debuting First

Monday August 3, 2020 3:14 am PDT by
Apple last week confirmed that its "‌iPhone‌ 12" launch will be delayed this year due to the ongoing global health crisis and restrictions on travel. Apple last year started selling iPhones in late September, but this year, Apple projects supply will be "available a few weeks later," suggesting a release sometime in October. We're expecting a total of four OLED iPhones in 5.4, 6.1, and...

Top Stories: Try the 5.4-Inch iPhone 12 Display Size, Blockbuster Earnings, Tim Cook at Antitrust Hearing

Saturday August 1, 2020 6:00 am PDT by
Another busy week of Apple news and rumors has wrapped up, with a lot of focus on Tim Cook's appearance at a Congressional antitrust hearing and a blockbuster earnings report. Subscribe to the MacRumors YouTube channel for more videos. We continued to hear rumors about the upcoming iPhone 12 lineup, including a rare admission from Apple that the lineup will launch "a few weeks later" than...

Just How Small Will the 5.4-Inch iPhone 12 Screen Be? Try It Out for Yourself

Tuesday July 28, 2020 12:57 pm PDT by
As rumors of the iPhone 12 have continued to build over the past few months, the one model that has the most excitement around it is the smallest 5.4" model. The iPhone 12 is believed to be coming in 5.4", 6.7", and 6.1" sizes. Dummy models have shown how much smaller the 5.4" is compared to the rest of the iPhone lineup. The upcoming 5.4" iPhone falls in-between the size of the original...

Unreleased iPod Touch with Mac Pro Glossy Black Finish Shared Online

Sunday August 2, 2020 11:32 am PDT by
Twitter user @DongleBookPro has today posted images of what seems to be a first-generation iPod Touch prototype with a 2013 Mac Pro-style glossy black finish. The Twitter user claims that the iPod Touch prototype pictured has "the same coating as the 2013 Mac Pro." Had the finish been selected for the final product, it also would have been similar to the metallic glossy black finish that...

Apple Confirms This Year's iPhone 12 Models Will Be a Little Bit Late

Thursday July 30, 2020 2:34 pm PDT by
During today's earnings call covering the third fiscal quarter of 2020 (second calendar quarter) Apple CFO Luca Maestri confirmed that Apple is expecting to release this year's iPhones later than usual. Maestri said that Apple last year started selling iPhones in late September, but this year, Apple projects supply will be "available a few weeks later." Multiple rumors have suggested that ...

Battery Likely for Upcoming Apple Watch Series 6 Filed in Certification Listings

Saturday August 1, 2020 5:46 am PDT by
A battery likely for the upcoming Apple Watch Series 6 has been filed at the Korea Testing and Research Institute and discovered by a Twitter user @yabhishekhd. Certification for a 1.17Wh battery with a capacity of 303.8mAh was issued on June 23 by the KTR, a Korean regulatory body that approves and tests new hardware ahead of public sale. The battery seems to be destined for a future...

Apple Watch Series 6 to Feature Blood Oxygen Monitoring Sensor

Friday July 31, 2020 1:56 am PDT by
The Apple Watch Series 6 will add blood oxygen monitoring to its features list when it's launched later this year, according to a new report from DigiTimes. Apple Watch 6 will feature biosensors that can monitor sleeping conditions, detect blood oxygen and measure pulse rates, heartbeats and atrial fibrillation, and will also incorporate MEMS-based accelerometer and gyroscope, all allowing the ...

Apple Marks Return of NHL With New 'Hockey Tape' Ad Shot on iPhone 11 Pro

Saturday August 1, 2020 2:33 am PDT by
Apple today marked the return of NHL hockey with a new "Shot on iPhone" ad on its YouTube channel in Canada. Titled "Hockey Tape," the 30-second video features Vegas Golden Knights players Marc-André Fleury and Mark Stone having some on-ice fun with the iPhone 11 Pro, which they attach to the boards, a hockey stick, and a skate with hockey tape. "See the game like never before with Ultra ...

Emails Reveal Why Steve Jobs and Phil Schiller Blocked In-App Purchase of Kindle Books

Friday July 31, 2020 6:25 am PDT by
Internal Apple emails, made public by the House Judiciary Committee's antitrust inquiry, have revealed information about why Apple blocked in-app purchases of Kindle books on iOS devices, reports The Verge. Two sets of emails between Steve Jobs, Phil Schiller, Eddy Cue, and various other senior Apple executives, disclose the exact thinking behind how Apple approached Kindle on iOS. The...