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.
BS, Back it up with references. You just did. The prices I provided and the models being sold are exact price quotes from Apple for models being sold collected from Apple RIGHT NOW on their website.
The iPhone 5C has been discontinued for over a year.
You just blew yourself out of the water, Central_VA, because your data is completely out of date. Now, you provide your source, which you took only parts, completely out of context.
I told you according to the tear down companies, the total costs of building an iPhone were around $240. Here is one published on CNBC on September 30, 2015, much more up-to-date than your estimation which calculated the iPhone 6s Plus at $236:
Apple rakes in $513 on every iPhone 6s Plus sale
CNBC lowballed assembly labor costs at just $4.50 per iPhone, ignoring all other costs associated with assembly, adding that a component cost of $231.50 to get their $236.
To that $236, I would then add a list of a lot of other costs they did not include which must be included, but must be included. I'm an Economist. I know what to include. These guys are tech repair guys and they don't even think of these things, but CNBC should have.
CNBC's article is pretty bad, claiming a 217.4% markup, because they totally ignore all other cost factors, and I do believe they do it deliberately, being a left-wing rabble rousing mainstream media idiot organization. I am not alone in this evaluation of CNBC's negativity toward Apple: "Six Reasons why Apple Closed 2015 with a Whimper." Reasons #2 and #3 are two of the six, with #3 enumerating CNBC as the poster child for #2.
Your source was compiled about two years ago by an economist at UBS, and even then didn't bother to look at Apple's own Financial statements filed with the SEC. Apple reports that their operating margin is NOT 50%, it's 39%. Since the iPhone is 60% or so of their revenues, you can pretty much assume that the gross margin for the iPhone is pretty damn close to that, not 50%. This year, Apple reported that the gross margin for the Apple Watch was around 49%. But that product was not present during the time UBS was making their calculations.
UBS also says "Apple's investment in non-leading edge production equipment," however, UBS is wrong about that, in that Apple is always re-tooling their assembly lines to modernize with leading edge equipment. UBS is really lost on their analysis. Apple has about $220 Billion invested in plant and equipment they provide to contractors. No one else can afford to do such investment, only Apple can do that, and does. UBS's economist missed that. He/she also missed a big one: Research and Development amortization for iPhones. Apple spends about $12 Billion annually on R&D and that is also allocated across all product lines as a cost.
Manufacturing costs are NOT solely labor, It is all the components that go into constructing the product of which Labor is just a compound component from an accounting and economic viewpoint.
Your simplistic UBS chart is erroneous in featuring labor as somehow important and calling it "Manufacturing" because it most likely is not a complete total, especially since the "Major Components" will also involve labor to make the raw materials into components. Perhaps, the term should have been more properly labelled "Final assembly."
I have been CEO as well as being educated as an Economist and also in Finance. Manufacturing is never looked at as merely the multiple steps of LABOR that goes into making a product. . . and anyone one who just considers that is misusing the technical terminology. It's looked at as "Manufacturing Costs." Notice that "costs" is plural, Central_VA.
The reason for that is because manufacturing is a process including materials, energy, labor, machine wear and tear, overhead, supervision, shipping of materials, etc. Labor is only one input of "Manufacturing costs" and a minor one at that. The cost of manufacturing the iPhone is the sum total of all those. YOU claimed the cost of manufacturing an iPhone was only the labor because you don't understand business or micro-economics at all.
As I said, Central_Va, don't get into a factual pissing match with an Economist, because you will be handed your head. You are not armed to be able to fight.