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Apple lists an unlocked 16GB iPhone 5S on its site at $649 and an iPhone 5C at $549 Manufacturing, including freight, to equal $18-20 per unit.

Do you always make up your arguments? Pull them out of your nether regions? The Apple iPhone 5S is not being offered on Apple's website for anywhere near that price. The Apple iPhone 5C is NOT even available. Those models are two years ago. Apple is now offering iPhone 6S from $649, 6S plus from $749, iPhone 6 from $549, iPhone 6 Plus from $649, and the iPhone 5S from $450

The cost of an iPhone has been calculated by several organizations who do break downs and then estimate the parts and labor that goes into each product have consistently come up with costs around $240 to $260 based on the subsystems and materials, certainly not $18-$20 per unit. They do not include shipping nor do they include amortized R&D, amortized future warranty support, overhead, or a host of other costs that people like you fail to even consider that must be included in every product produced.

Your estimates are of by an order of magnitude and then some.

BS, Back it up with references.

Apple lists an unlocked 16GB iPhone 5S on its site at $649 and an iPhone 5C at $549. In a report of exacting detail, UBS estimates gross margins of around 50% for both devices. The report notes: Adding box contents, manufacturing, and non-BoM [Bills of Material] related costs, we estimate gross margins could ramp to 45-55% for the iPhone 5S and 48-54% for the iPhone 5C overtime as production scales and matures. In our view, non-component costs are likely to reach to approximately 33-40% of total device costs, largely driven by deprecation and software amortization expense. We estimate Apple's depreciation expense is roughly $25 per device, accounting for the company's sizable investments in non-leading edge production equipment. We assume Apple's warranty accrual rate is 1.8% and manufacturing, including freight, to equal $18-20 per unit.

Link here.

Get it? 15 bucks labor on a 500-600 buck phone.