Apple's main assembly partner for iOS devices, Foxconn, is looking to increase its presence in Apple's supply chain as it considers constructing a new plant to provide displays for the popular devices, according to The Wall Street Journal. Total investment in the project could reach $5.7 billion.
Foxconn, formally known as Hon Hai Precision Industry Co. , is discussing a possible investment with the government of Zhengzhou, about 750 kilometers south of Beijing, according to people familiar with the talks. The two sides are discussing terms such as how to divide the investment, which could reach as much as 35 billion yuan ($5.7 billion), the people said.
The display is typically the most expensive single component in Apple's iOS devices, and the company has long sourced the parts from a variety of vendors including Samsung, LG Display, Sharp, and Japan Display. Foxconn has been seeking to improve its display expertise in recent years, pursuing a troubled partnership with Sharp as it has tried to position itself to win orders for iPhone and iPad displays.
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Don't forget that there are other costs to take into account, the image just shows cost of materials and labour. It doesn't factor in R&D, distribution, marketing, warranty costs, etc. You may as well double the BOM cost to get a more accurate cost before taking into account the actual profit margin.
Not just the R&D and other things that go into the product, but also the services that come with it.
Such as iCloud, Siri, Maps, Genius Bar and many more. With Android, Google provides these with revenue coming from "selling" you to advertisers. But Apple has to pay for these from up-front revenue.
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There was nothing that they could do about it. Do remember that the cost structure of living in the U.S. is nothing like that of India or China. The minimum wage in the U.S. is a lot more than the numbers quoted above, and yet it still is inadequate in almost all of the country. Someone working full-time (40 hours x 50 weeks = 2000 hours) only makes $14,500 per year. That's below the poverty line.