A 16GB iPhone 5S costs Apple Inc. $213 in materials, while a 16GB 5C comes in at $156, according to a report published Monday by UBS AG.

The tear-down shows the big saving that the "unashamedly plastic" case of the 5C represents, coming in at $42 less than the aluminum body of the 5S. The other big saving is the $7 fingerprint sensor.

Apple...