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February 29, 2012

Real Cost of Manufacturing an iPhone : $293

An iPhone generates approximately $650 in revenue for Apple. This figure has remained fairly steady over time. Using deduction from overall margins, it’s possible to estimate the gross margin on the product to be around 55%. That means that the cost of goods sold (COGS) for the iPhone is about $293

Horace Dideu from Asymco  breaks up the cost structure of an iPhone when it reaches consumers

 Typically there are four main categories of costs for a phone:

.         Bill of materials (BOM). This represents the cost of the components that go into the device. These are paid to suppliers.
2.      Transportation/warehousing. This is the cost to transport and store the product before sale. This is paid to shipping companies and warehousing.
3.      Manufacturing cost (including labor). This is paid to contract manufacturers.
4.      Warranty expense. This is paid back to customers for returned product that can no longer be sold.