Tuesday, April 5, 2016

iPhone SE costs $160 to build

Whenever a new iPhone comes out, analysts sprint to figure out how much it costs to produce it in order to estimate Apple's profit margins. For the new iPhone SE, that cost is estimated to be $160.

Even though Apple included some of its latest and greatest hardware in the iPhone SE, the costs are kept down by using other componentes (like the LCD screen and touch ID) from the older iPhone 5S, which are now far cheaper. The screen alone now costs about half than it did when it was introduced in the 5S.

This allows Apple to keep an healthy profit margin even tough this is the cheapest iPhone ever, and we must keep in mind that the sole purpose of the $160 iPhone SE, being sold at $399, is to redirect buyers to the $499 64GB iPhone SE version - which costs Apple $170 to build. If you so do, you're giving Apple and extra $100 for something it costs them only $10.

I'm really curious to see how the market will react to this iPhone SE, and if all those people "complaining" about the increased size of iPhone 6/6S will now put their wallet where their mouth is. It's no secret I have stuck with the iPhone 5S because I was one of those persons not wanting a larger iPhone... and I'm highly tempted to get one of these.

The only thing still keeping me at bay is that here in Portugal the $499 64GB iPhone SE costs €599 (roughly $681)!

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