Apple's iPhone SE, released March 31, is a return to a smaller phone after the latest generation of iPhones have entered into phablet territory, but it packs a lot into the frame. The new phone from Cupertino shrinks down the technology of the iPhone 6 and iPhone 6s into a 4-inch package with a cost of $160 to build, according to an iPhone SE teardown.
The parts within an iPhone SE with 16GB of memory cost $156.20 with an additional $3.80 for manufacturing cost, according to the report from research firm IHS released Monday. The iPhone SE 16GB retails for $399. Despite borrowing from the iPhone 5, iPhone 6 and iPhone 6s, the iPhone SE is an improvement from previous generations in terms of performance.
"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," Andrew Rassweiler, senior director of cost benchmarking services at IHS, said in a statement. The iPhone SE features the A9 processor and 12-megapixel camera found in the iPhone, RF technology for LTE connectivity and secondary camera from the iPhone 6, and a similar design to the iPhone 5s, according to the breakdown.
For a comparison, Apple's largest phone costs $70 more to manufacture. The iPhone 6S Plus materials cost $231.50 with an additional $4.50 in manufacturing cost for a total of $236. The iPhone 6S Plus 16GB model retails for $749. The improved touchscreen with Gorilla Glass 4 cover glass was the most expensive item in the bill of materials, at a cost of $52.50. The iPhone 6 16GB costs Apple $200.10 to manufacture and the iPhone 6 Plus 16GB costs $215.60 with a retail price of $549 and $649, respectively.
Apple's profit margin is much smaller with the iPhone SE, but the tech titan is looking for sales volume with its new phone, according to IHS. "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, in a statement.