IHS teardown of 16GB iPhone SE reveals it costs about $160 to build
Arik Hesseldahl / Re/code :
Context & Ripple Effects
The Chipworks teardown days earlier showed the iPhone SE is a parts-bin device — processor, memory, NFC chip and modem carried over from the 5s, 6, and 6s with few new components. IHS now puts a number on that strategy: roughly $160 to build the 16GB model.
That makes the SE the cheapest iPhone build in IHS's teardown series, which has tracked flagship bills of materials from the $290 Galaxy S6 Edge through the iPhone 6s Plus at about $236 — and it explains how Apple prices a new phone at $399 while reusing already-amortized silicon.
First-order effects
- Apple gets an unusually wide gap between build cost and retail on the SE: at roughly $160 against a $399 entry price, the parts-bin approach undercuts even the ~35%-of-sale-price material ratio IHS later measured on the iPhone 8.
Second-order effects
- Rivals like Samsung, whose flagship builds IHS consistently prices well above Apple's per-unit figures, face a competitor that can sell at mid-range prices without accepting mid-range margins — pressuring Android vendors' budget-line economics.
Third-order effects
- If the pattern holds, Apple's playbook is to harvest each generation's proven components into a lower-priced device, letting flagship BOM inflation (the iPhone 7's cost rose 18% year-over-year per IHS) coexist with cheap entry models rather than forcing a price-floor trade-off.
The trend: Teardown economics are becoming the standard lens on smartphone pricing, and the SE shows component reuse as Apple's structural answer to rising flagship build costs.