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What it actually costs to make an iPhone 7

<i>[Lisa Gao, from Chicago, compares a new jet black iPhone 7, right, with her iPhone 6 at the Apple Store on Michigan Avenue, Friday, Sept. 16, 2016, in Chicago. (AP Photo/Kiichiro Sato)]</i>
[Lisa Gao, from Chicago, compares a new jet black iPhone 7, right, with her iPhone 6 at the Apple Store on Michigan Avenue, Friday, Sept. 16, 2016, in Chicago. (AP Photo/Kiichiro Sato)]

At a starting price of $899, the new iPhone 7 isn’t cheap.

But how much does it cost to produce Apple’s flagship phone?

According to market research firm IHS Markit, who recently dissected the iPhone 7, the total amount to manufacture it comes out to about $298, with the price of materials being $291 alone.

That price tag equals roughly a third of the phone’s retail value.

IHS Markit said it’s also markedly more expensive than the cost of the previous iPhone model.

Though the iPhone 7 and its predecessor are hard to distinguish when they’re side by side (besides the 7’s obvious lack of a headphone jack), it does have some pricey upgrades under the hood.

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The new model saw its base storage upgraded from 16 GB to 32 GB, its display boasts a wider colour gamut and it has an improved haptic engine, which reproduces the sensation of motion and tactile experiences.

These beefier specs result in the total manufacturing cost to be an estimated $49 higher than the iPhone 6.

In fact, the iPhone 7 is one of the most expensive phones Apple has produced (IHS Markit has yet to take the iPhone 7 Plus apart).

It’s $298 price tag surpasses the cost of all previous flagship models, including the original iPhone which takes second place at about $288.

It does however trail the iPhone 6S Plus, which cost an estimated $313 to produce.

The cost to make the iPhone 7’s main competitor, the Samsung Galaxy S7, is roughly in the same ballpark.

However, the South Korean tech giants’ bottom line on the phone appears to be lower.

The S7 currently has a retail price of $750 for its 32 GB base model and costs about $338 to make, according to an IHS Markit teardown.