… compared to how much you have to pay for the final product

Sep 21, 2016 11:42 GMT  ·  By

Apple is one of the most profitable companies in the entire world, and in the next few paragraphs you’ll easily understand why: the company is indeed offering great value for the money and premium quality, but it all comes at prices that make its devices fairly expensive.

The newly-launched iPhone 7 is living proof and is subject to so many jokes because of its hefty price (i.e. why do so many Americans hate Donald Trump? Because he has an iPhone 7 and both kidneys).

A recent analysis of the production costs made by CNN Money shows how Apple is bringing home the bacon with the iPhone 7, and it turns out there’s a lot of bacon.

The $750 iPhone costs $292 to make

According to this breakdown, making the iPhone 7 has the following estimated costs (keep in mind that this is only the cost of parts in US currency):  

screen $37
battery $4
cameras $26
logic board $74
speakers: $11.50
casing: $22
other parts: $117.50
This means that building an iPhone 7 with 128 GB of storage space costs approximately $292, while customers need to pay $750 when getting it from the store.

And it doesn’t stop here. Note that the most expensive iPhone comes with 256 GB of storage and is priced at $970, but it otherwise boasts the same hardware as the other models, so the only difference is the increased space. But the flash storage costs a lot less than the difference suggested by the retail price, so once again, Apple’s playing the smart card here.

Without a doubt, the final price of the iPhone 7 is bigger than that because it also involves R&D costs, marketing, salaries, and so much more, but it’s very clear that Apple is still gaining huge profit with this device. And given the fact that it sells tens of millions of them, it’s now a little bit clearer why it’s one of the most profitable companies in the entire world.

What you see here costs less than $300, according to estimates
What you see here costs less than $300, according to estimates

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iPhone 7 pricing starts at $650
What you see here costs less than $300, according to estimates
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