As we all know by now, Foxconn employees slave in China to make the Apple iPhone we so love. A teardown of the parts, who make them and how much they cost is available from The Economist and reveals that Foxconn manufacturing costs are all of $7 per phone. In other words, all the workers working to make one iPhone earn $7 per phone. Foxconn itself takes a $7 margin. All the components add up to $178. Taking into account an average sale of $560 per 16GB GSM phone, Apple’s slice per phone is therefore $368.
Call me naive, but I thought that one reason companies use to justify outsourcing manufacturing to other countries is to take advantage of lower manufacturing costs in those countries so they can pass the savings on to consumers at home. I guess I was wrong. It is to increase their profits. The jobs could be kept here but that would decrease their profits. As simple as that.
Interestingly, Samsung supplies three main components of the iPhone: the Flash memory, the DRAM memory and the Applications processor.
See the Apple iPhone Teardown @ thestar
Download the Teardown at: scribd.