Defeat the Markup: Iphone Built by Cruising Shenzhen

[Scotty Allen] from Strange Parts, has just concluded a three month journey of what clearly is one of the most interesting Shenzhen market projects we have seen in a while. We have all heard amazing tales, pertaining the versatility of these Chinese markets and the multitude of parts, tools and expertise available at your disposal. But how far can you really go and what’s the most outrageous project can you complete if you so wished? To answer this question, [Scotty] decided to source and assemble his own Iphone 6S, right down to the component level!

The journey began by acquiring the vehemently advertised, uni-body aluminium back, that clearly does not command the same level of regard on these Chinese markets when compared to Apple’s advertisements. [Scotty’s] vlog shows a vast amount of such backings tossed as piles in the streets of Shenzhen. After buying the right one, he needed to get it laser etched with all the relevant US variant markings. This is obviously not a problem when the etching shop is conveniently situated a stones throw away, rather simplistically beneath a deck of stairs.

Next came the screen assembly, which to stay true to the original cause was purchased individually in the form of a digitizer, the LCD, back-light and later casually assembled in another shop, quicker than it would take you to put on that clean room Coverall, you thought was needed to complete such a job.

[Scotty] reports that sourcing and assembling the Logic board proved to be the hardest part of this challenge. Even though, he successfully  purchased an unpopulated PCB and all the Silicon; soldering them successfully proved to be a dead end and instead for now, he purchased a used Logic board. We feel this should be absolutely conquerable if you possessed the right tools and experience.

All the other bolts and whistles were acquired as separate components and the final result is largely indistinguishable from the genuine article, but costs only $300. This is not surprising as Apple’s notorious markup has been previously uncovered in various teardowns.

Check out [Scotty’s] full video that includes a lot of insight into these enigmatic Shenzhen Markets. We sure loved every bit of it. Now that’s one way get a bargain!

47 thoughts on “Defeat the Markup: Iphone Built by Cruising Shenzhen

  1. Even if he did manage to assemble the logic board himself, wouldn’t the software be an even bigger problem ?
    Maybe he could get the bootloader and iOS into the memory, and maybe it would even boot up, but it would not be usable. The serial number / imei is not registered with apple as a genuine iphone, so he could not activate it as one. By purchasing a genuine, but used logic board he avoided that problem.

    1. You can get reflashed memorychips on the markets with any OS you like – the serial number is indeed a thing -> you need to buy several parts as a “matched set”. The beauty of the refurbished parts market is that these are all just available from original apple hardware – so they are indeed genuine / preregistered.

      1. Don’t think soldering a logic board would be perfect doable for a hobbiest in Jie’en :)

        Getting an used working logic board is the best option. Replacing the flash chip with a bigger one can be done though :)

        1. You underestimate the technical capacity of Jie’en – it’s the only place I’ve ever stayed where one of the previous inhabitants left behind a custom 3d printed adapter for the shower head holder so it didn’t spray directly at the toilet.

  2. “, but costs only $300”

    I guess I have seen a different video then – several trips to China, ton of wasted tools and parts (he was trying to assemble the phone motherboard component by component!), hotel, food and the network of locals to help you navigate the malls and vendors not speaking English and finally the huge amount of personal time spent on this obviously don’t cost anything/don’t have any value, right?

    If he totaled all of it together, my guess would be that this phone project has cost him $2-3k at least. The devil is in the externalities that you don’t count, but you would have if you were a business (otherwise you would go broke).

    Of course he did it as an experiment and a learning experience, not as a way to get a cheaper iPhone.

    1. Also, something has to pay for all those designers, engineers and programmers… sure, there’s a painful markup, but it’s literally impossible to sell something for just the cost of the components if you want to actually stay in business.

      1. Apple has one of the highest revenue per employee figures of any major corporation; it’s around $2 million. And the margins are pretty fat.

        I’m not arguing that this is improper or anything, I’m just saying that it’s not as if the pricing is driven by the expenses of the enterprise.

        I think this is an interesting exercise, and I’m curious how scalable the idea is, once the one-time costs are paid down.

        1. It’s not a scalable idea. Parts would quickly run out (and/or get much more expensive) and your suppliers would dry up.

          Hint: the prices you can, for example, buy a screen for, are mostly unrelated to what the screen supplier sells them to Apple for. It’s often much less than Apple pay at volume. Ditto for most of the components.

          Much of the spares market is based on pre-production overflow (Apple will often have 5x or more the number of parts they need for preproduction runs, in order to shake out the supplier flow: I’ve bought screens off Amazon that had apple part numbers that were pre-production) and manufacturing rejects (there are insanely high, and some might say excessively arbitrary, standards for all parts going into the flow, because it’s very hard to make one exact whole if every part isn’t held to an even smaller level of variance). These parts have been made and are essentially junk if they don’t get sold.

          Buying a second-hand mainboard is also probably one of the only ways to get a working system. There’s a cryptographically strong manufacturing flow which you’d run afoul of if you were buying “blank” chips – note that every CPU has unique keys. Because these parts never get sold to anyone but Apple, it’s not like buying a Qualcomm processor. There is no “alternate provisioning flow”.

          How do I know this? I worked on the iPhone for many years.

    2. > “Of course he did it as an experiment and a learning experience, not as a way to get a cheaper iPhone.”

      Exactly, and the ad revenue from posting the video on YouTube certainly paid for those outside costs, as well as the price of the components themselves and the labor from the market vendors. The real value is that his name is out there; I’ve seen this story on several tech news sites including Hacker News.

        1. Are you asking if I think the revenue is worth much, or are you stating that it is, or are you saying you don’t think it is? Your phrasing is ambiguous.

          I think between the ad revenue and the media exposure, the venture paid for itself and then some.

      1. I haven’t run any ads on this video, nor have I charged anyone licensing fees to use it in their content. Just want to share a cool project and interesting story, and build an audience that wants to see more of this kind of thing.

    3. If it’s the first one he built, of course it’s expensive – he’s figuring out the way to do it correctly. If he knew how to navigate the Shenzhen markets properly (like Bunny Huang for instance), he could do it on his own entirely for about that stated cost of $300. False starts cost you money, and on your first go you may hit multiple ones like he did.

      Dare I say that for the more enterprising (and perhaps “ethically flexible”) of us, building and selling these on something like eBay as brand new in box phones would make a nice source of side income. Not that I intend to try it of course.

      1. Maybe not as “new in box”, but one could make back their investment plus a decent profit if one could source the individual parts in bulk, then build and sell them as “seller refurbished”, something eBay supports. Based on what we saw in the video, this wouldn’t be difficult. The margin would be lower than even a discounted “new” price, but you wouldn’t run the risk of eBay banning you for misrepresenting your wares either.

  3. Interesting to watch but doesn’t sweeten Apple’s offerings. My Android with an Octocore and 8GB of ram was $100 from a legitimate seller and legitimate parts… Also it has a headphone jack (yes I know not a prob for 6s).
    IMHO they should just sell it as a loss leader and upcharge even more for the crap on iTunes (similar to Xbox). That or stop designing buildings with perfectly recessed doors smh. So many folks without a home…

      1. @jonsmg: Sounds to me like a BLU, possibly the 2016 version of their Life One X. We got one for my wife, and it’s a kick-ass phone for the price, but there’s no developer interest in it and when BLU’s privacy fiasco surfaced we stopped using it and got her a Nexus 6 instead. The Nexus can be had for under $200 and runs circles around anything BLU puts out today.

    1. They get most of the revenue from their cuts of the carrier contracts. There is a perceived high cost of Apple stuff. But look how Samsung can not make money on huge volumes of cheaper phones. One of the pricing models works.

  4. Unless you purchase a paired motherboard and touchID assembly – phone will throw errors. Like it or not this is a security thing that only Apple can fix and it prevents someone from breaking into a phone by swapping touch sensors. Automobiles are getting more and more like this – can’t replace a some parts without the dealer’s proprietary software to re-key the replaced module to your car’s ECU’s.

      1. Well – car manufacturers /do/ have a reason to ensure hardware security, but the car security situation is so laughably bad that that’s a bogus excuse for DRM.

  5. Worth mentioning that as a Shenzhen native this is probably the most authentic representation of Shenzhen I’ve seen. There’s a lot of paid junkets that are provided to Western journalists and speakers- and they tend to say what their hosts want which leads to a pretty distorted view of what we have and what we don’t. Scotty really nails the feel of the markets and doing other hardware projects- getting custom CNC, PCBs etc is a very similar experience (although the legwork is optional).

    1. Havent been to Shenzhen yet, but have to other south asian electronic markets and the feel is pretty much similar, if not as vast and amazing. Defo booking my tickets to head to Shenzhen this year!

  6. In a similar vein as this article, here’s a repair video of a macbook. It highlights issues with repairability of today’s consumer electronics, and goes to show how companies like Apple try to ‘own’ their users and sell them over priced hardware. one o

    1. True, but if your job or lifestyle already has you headed to China anyway, why not build a phone while you’re there? It’s an adventure of opportunity, not a money saving scheme.

      1. Yeah I know people who go there. It even makes some sense if you’re in Japan.

        Supposedly you can build anything just with what’s in open air markets there.. I’d source some volume if I was there.

      1. it’s profit, and no. I’m not going to spend $4,000.00 to save on an iphone. I’m also no a big fan of the ‘it’s just money’ ideology that seems to only occur with people who have never had to earn anything..

  7. Now that we heard about the apple v qualcom suit we should take all the licensing in consideration when talking about that markup. It’s only partly an ‘apple markup’ and seemingly for another chunk a markup from many other companies that want their cut.

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