Apple is flying high off of the sales of the latest installments in its flagship lineup of smartphones, the iPhone 5S and iPhone 5C. While the public seems to be responding well to the new iPhones, new reports from HIS show that Apple is making a huge profit on the iPhone with the price being way higher than it needs to be.
According to the findings, Apple spends at least $191 on components that make up a 16GB iPHone 5S. The cost rises to $210 for a 64GB unit according to AllThingsD. Each device costs $8 to assemble, bringing the total for each iphone 5S model to between $199 and $218. The price is very similar to last year's iPhone 5 which IHS estimated was around $205. Without a contract, the iPhone 5S sells for $649 to $849 depending on storage capacity.
Meanwhile, on the colorful low-cost iPhone 5C, HIS estimates that the cost of components plus manufacturing ranges the device from $173 to $183, depending on the storage option you want. This includes $7 for assembly. The 5C sells for between $549 and $649 without a contract.
"I would say that they're almost the same phone, except that the 5s has the fingerprint sensor, the A7 processor and some newer memory chips that consume less power. Beyond that, they're basically the same," said HIS analyst Andrew Rassweiler.
This evidence is not to suggest that the company's markups are a result of greed. Obviously significantly more goes into the business of smartphone making than manufacturing alone, which likely accounts for the extra cost of the device without a contract. However, it is a good way to understand exactly what components go into each device and whether or not the iPhone 5S is better for you than the new iPhone 5C.
