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Chronicles

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iPhone 6 costs an estimated $200 to $247 in parts and labor to build, 6 Plus $216 to $263; profit margins 69-70%; Samsung supplies 40% of A8 chips

Teardown Shows Apple's iPhone 6 Cost at Least $200 to Build  —  Apple spends $200 to $247 in parts and labor to build an iPhone 6 …

Re/code Arik Hesseldahl

Context & Ripple Effects

Apple's estimated iPhone build cost had stayed close to $200 across the iPhone 4 teardown and the iPhone 5S component estimate. The new models pair a larger hardware design with a similarly wide difference between retail pricing and parts-and-labor costs.

The A8 breakdown also makes Samsung's role measurable: it supplies an estimated 40% of the chips, tying a significant portion of Apple’s flagship-phone silicon volume to a named external supplier.

First-order effects

  • Apple retains a large estimated per-unit spread between iPhone selling prices and the $200–$263 parts-and-labor range, before expenses not captured by a teardown.
  • Samsung receives an estimated 40% share of A8 chip supply, making iPhone 6-family demand directly meaningful to its semiconductor business.

Second-order effects

  • Apple’s dependence on Samsung for a substantial A8 share makes chip availability and commercial terms a material input to iPhone production planning.
  • The higher estimated build range for the larger model shows that Apple can differentiate the iPhone lineup while keeping component-and-assembly costs well below retail pricing.

Third-order effects

  • If successive teardowns continue to show stable build costs alongside expanding iPhone configurations, premium smartphone competition will increasingly turn on supply-chain execution and component allocation rather than bill-of-materials cost alone.
  • A8 sourcing illustrates how handset rivals can remain commercially interdependent at the component layer, concentrating strategic importance in semiconductor suppliers.

The trend: Premium smartphones are using tightly managed component supply chains to add differentiated hardware while preserving wide retail-to-build-cost spreads.

Related: Apple · Samsung · A8 · iPhone · iPhone 5S teardown cost estimate · iPhone 4 parts cost estimate

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