Phablet-Size iPhone 6 Plus Boosting Apple’s Profits

Apple may make a killing on the iPhone 6 Plus. ThatEUs because the larger screen size adds an extra $100 to the sales price but the phablet-size device costs a mere $16 more to make than the smaller iPhone 6. So says a breakdown analysis from market research firm IHS Technology.

According to the IHS' Teardown Mobile Handsets Intelligence Service, the bill of materials (BOM) for the iPhone 6 equipped with 16 GB of NAND flash memory totals $196.10. The cost of production rises to $200.10 when the $4 manufacturing expense is added.

By way of comparison, the BOM of the iPhone 6 Plus totals $211.10, and rises to $215.60 with the additional $4.50 manufacturing cost added. A quick calculation reveals this is only $15.50 higher than the total for the iPhone 6. That means some sweet margins for Apple if consumers buy into its phablet.

Maximizing Profitability

The iPhone 6 totes a 4.7-inch screen, and the iPhone 6 Plus offers a 5.5-inch screen. Other than the size of the display, thereEUs not much difference between AppleEUs two new smartphone models. Although the larger screen is more expensive, it doesnEUt account for the entire cost differential between the two phones. The Plus also carries higher BOMs for its enhanced camera and battery subsystems.

EUApple has always been adept at offering higher-end iPhone models with enhanced, desirable features -- and then pricing those versions for maximum profitability,EU said Andrew Rassweiler, senior director, cost benchmarking services for IHS.

EUIn 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,EU he added.

Engineering Ingenuity

Apparently, the higher price...

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