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Are 'Applenomics' Unfair? iPhone 6S Plus Costs 48% More To Make Than SE, But Is Priced 88% Higher

Are 'Applenomics' Unfair? iPhone 6S Plus Costs 48% More To Make Than SE, But Is Priced 88% Higher

iPhone SE from Apple Inc. (NASDAQ: AAPL) is being marketed as the low-cost iPhone targeting emerging markets, as it is a slimmed down version of IPhone 6S and comes at a price of $399.

However, the price may not be as much of a bargain as it appears.

Let's see whether the $399 price is actually a better bargain for consumers.

According to IHS, an entry-level 16GB iPhone SE costs about $160 to build. Notably, iPhone SE features the same A9 chip that powers iPhone 6S and also has the 12MP camera as iPhone 6S, which costs $649.

"The iPhone SE represents an amalgamation of three iPhone generations – iPhone 5s, iPhone 6 and iPhone 6s – rolled into something altogether new," Andrew Rassweiler, senior director of cost benchmarking services at IHS, said in a statement."

Related Link: Apple iPhone SE Sales Are "Uninspiring," Supply Chain Analyst Warns

"Despite its physical resemblance to the iPhone 5s, the resulting product is far superior. In fact, the only significant tradeoffs a consumer would make with the iPhone SE against the iPhone 6s is smaller size and lower screen resolution," Rassweiler noted.

Data from IHS show that Apple's total cost to manufacture the iPhone 6S Plus is $236, an increase of 48 percent from the manufacturing cost of SE. The iPhone 6S Plus costs $749.

From the economics viewpoint, an iPhone 6S Plus costs $350 more than SE and customers pay 88 percent premium for a product that is only 48 percent more expensive to build.

Image Credit: Public Domain


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