EL SEGUNDO, CA — Apple is paying about $4 in labor and manufacturing costs for each new iPhone 6, IHS said in its latest teardown report. 

The bill of materials of the iPhone 6 equipped with 16 Gb of NAND flash memory amounts to $196.10, according to a preliminary estimate by IHS. The cost of production rises to $200.10 when the $4 manufacturing expense is added.

The BOM of the iPhone 6 Plus amounts to $211.10, and rises to $215.60 with the additional $4.50 manufacturing cost added. This is only $15.50 higher than the total for the iPhone 6.

The profit margin on the iPhone 6 Plus is dramatic, with consumers forking over an extra $100 to cover the added $16 in materials and labor that Apple pays to build it, IHS said. The iPhone 6 Plus features an additional 0.8" of screen size over the iPhone 6. 

The unsubsidized pricing for the two phones is $649 and $749, respectively.

"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, 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 table below presents the preliminary BoM and manufacturing cost estimate of the Phone 6 and iPhone 6 Plus. The teardown assessments are preliminary in nature, account only for hardware and manufacturing costs, and do not include other expenses such as software, licensing, royalties or R&D.

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