MANILA, Philippines – While the retail price of Apple’s iPhone SE is set at $399 without a contract, a teardown of the iPhone SE by research firm IHS revealed that the phone may actually just cost $160 to build. It also shares parts from previous iPhone generations.

The report, released Monday, April 4, outlined the deconstruction and pricing of parts and manufacturing for the US version of the 16GB iPhone SE model. It also explains which parts appear to be based on existing iPhone models.

The bill of materials for the phone is around $156.20, rising to $160 when manufacturing costs are factored in.

A combination of older models

IHS’ teardown also said the iPhone SE “borrows many of the same – or at least extremely similar – components from 3 previous phone generations.”

The teardown points to the size and resolution of the display of the iPhone SE and iPhone 5 being the same, though mechanical components like the enclosure have been slightly modified.

IHS also noted that the iPhone SE “shares many of the same radio-frequency (RF) components used for LTE connectivity and uses the same Qualcomm (MDM9625) solution found in the iPhone 6.” They also have the same 1.2-megapixel secondary camera.

As for the iPhone 6s, the teardown reveals that the iPhone SE uses the same A9 processor. The 12-megapixel primary camera on the iPhone SE and the iPhone 6s is also the same.

Extending the product range

IHS estimated that, as with the iPhone 5C, Apple is extending its product range once again, with the hope of gaining new customers and enticing them to pay for a phone with more memory.

IHS added, “In fact, IHS estimates that Apple makes approximately $89 in incremental profit for each iPhone SE 64GB sold when compared with the iPhone SE 16GB.”

Wayne Lam, principal analyst of mobile devices and networks at IHS Technology, in describing the drop of Apple’s gross margin to further sales, went on to say, “When the profit machine that is Apple capitulates to the market forces of a maturing industry, it shows its tacit acknowledgement that even it is not immune to the dynamics of the global smartphone slowdown.” – Rappler.com