IHS Markit has performed a ‘teardown’ on the new iPhone 7 and has found that the bill of materials (BOM) is $219.8, which is higher than previous iPhones ($36.89 more than the iPhone 6) and more in line with competitors such as Samsung. Andrew Rassweiler, senior director of cost benchmarking services for IHS Markit said “All other things being equal, Apple still makes more margin from hardware than Samsung, but materials costs are higher than in the past.”
The analyst said that as well as the improved display (iPhone7 New Groundbreaking Display The Best News That Wasn’t), the iPhone 7 has a better haptic engine as well as eliminating the headphone jack. “Where there was an audio jack in the previous design, Apple replaced it with a symmetrical grill (sic) — not for speakers, but for the waterproof microphone, leaving more room for the larger battery and Taptic Engine,” Rassweiler said.
He also pointed out that despite dropping prices for flash memory, the move to a base level of 32GB has increased the BOM. IHS points out that Intel is providing modems (for only some versions according to Bloomberg) of the iPhone, the first win for the company in this segment for some time with Apple, although IHS doesn’t believe that the scale of the business is enough to affect Intel’s business results.