An Apple iPhone Unit Costs Just $30 to Produce

February 23, 2012, By Sanjeev Ramachandran

The question of actual expenditure behind producing an iPhone has been guessed time and again since the devices from the first generation have stolen the public hearts.

Now, with ABC’s Nightline being given unprecedented access to one of the factories of Foxconn, which assembles the iPhone for Apple, the guessing machines are back to life again.

The show has revealed some interesting details on iPhone production. Each iPhone takes 24 hours to be built. Among these 24 hours, 6 to 8 hours are spent on software and component burn-in and testing. Interestingly, the report has also revealed that each worker on the iPhone assembly line at Foxconn earns $1.78 an hour.

These details have helped the analysts to make insights into the production costs of an iPhone. As per these assumptions, the expenditure of manufacturing an iPhone could be a little more than what was expected earlier as just $8 per device.

Analysts put the price of each iPhone unit could be around a possible range between $12.5 to $30.

It is also assumed that production process is a mixture of human labor and robot-driven sub processes.

Although the production costs can be brought down by automating the whole process, automation may be a costlier business and will make the process less flexible too.

However, Apple is actually paying very less with just 2 percent and 5 percent of the original sales price for the employees in the assembly line and spends more on warranty and transportation.

Even if the actual manufacturing cost per unit for iPhone is assumed as $30, Apple could be allocating $60 for transportation and warranty expense.

These assumptions put iPhone costlier than many rival products to produce. According to analysts, the cost is higher mainly because Apple is relaying on high grade designing and thorough quality testing.

Got anybody at Foxconn to get an iPhone for just $30?

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