iPhone 6 Plus: Plus-Size Screen, Plus-Size Margin

IHS finds iPhone 6 Plus retails for $100 more than iPhone 6 but costs only $15.60 more to make.
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El Segundo, Calif. --  Apple’s iPhone 6 Plus not only offers a bigger display than its little buddy the iPhone 6, but it also offers a heftier margin for Apple, according to a teardown analysis by IHS Technology .

The iPhone 6 Plus with 5.5-inch screen is priced at $100 more than the 4.7-inch iPhone 6, but the Plus costs only $15.60 more to produce, IHS said

“Apple has always been adept at offering higher end iPhone models with enhanced, desirable features and then pricing those versions for maximum profitability,” said Andrew Rassweiler, senior director of cost benchmarking services for IHS. “In the past, the premium versions of iPhone offered higher memory configurations for additional profit. While Apple continues this memory strategy, the company is also taking a similar approach with the iPhone Plus, structuring its pricing to add bottom-line profit on models that have a very desirable feature: a large phablet-sized display.”

The preliminary teardown assessment accounts only for hardware and manufacturing costs and does not include such expenses as software, licensing, royalties or R&D.

With a wireless contract, the 16GB version of the iPhone 6 is priced at $200, and the 16GB iPhone 6 Plus costs $300. The unsubsidized price of the two phones is $649 and $749, respectively. The iPhone 6 bill of materials and manufacturing cost comes to $200.10, and the 6 Plus cost is $215.60.

The iPhone 6 Plus’s bill of materials and manufacturing cost is due to a larger screen and enhanced camera and battery subsystems, IHS said.

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