Once the $5 "basic manufacturing costs" of assembling and testing are taken into account, the total cost for Apple to produce the 32GB iPhone 7 is $224.90, IHS Markit estimates.

In the UK the iPhone 7 starts at £599. That's £60 more than the iPhone 6s, even though the latest handset cost just $36.89 more to make, thanks to the upgraded camera, better battery and faster chips.

In the US the phone retails at $649, the same price as its predecessor.

Apple has slightly better margins on its handsets than Samsung, IHS Markit said, but the cost of production for the iPhone 7 is "in line" with Samsung's flagship Galaxy smartphones.

"All other things being equal, Apple still makes more margin from hardware than Samsung, but materials costs are higher than in the past," Andrew Rassweiler, senior director of cost benchmarking at IHS Markit.