Camera components represent 9.5% of total iPhone 7 material cost

What most people don't understand (or just pretend) is that for making a mobile phone, a company don't invest only in parts.
Behind the process, there is much more work and costs. For example, there is a lot of research to make the mobile every time better, engineers and designers works to create the hardware side, developers, analysts and tester works on making and improving the software, then there are costs for assembling, production line, packaging, shipping, customer service and back office assistance. And I'm sure I forgot many things.

"though Apple is famous for its high margins"
that is true, however let's not forget that apple makes it's own software (OS + apps) while the android manufacturers only improve different features over the standard android (mostly UI and features no one needs and no one wants) ... so yeah, that's a lot of money that have to go in the final price.

Not saying their margin isn't high still, but just that it's normal to be a higher margin that samsung for example, if you look only at the hardware price.

Perhaps software costs should be factored in to get a more complete picture.

The $26 / 9.5% is maybe a bit misleading:
AFAICT, that figure would indicate what Apple would save on the BOM if it deleted the Cameras.
It doesn't say how much lower the BOM would be if the phone were designed without cameras. Some of the remaining system cost is attributable to related systems, and common infrastructure.
On the A10 SoC, the Apple ISP, and the 4kp30 encoder seem camera related. If the video encoder is system-efficient, it likely includes a big SRAM for motion prediction.
In addition, consider:
- Camera physical & logical interfaces
- Memory/bus capacity for cameras and related subsystems
- Display/composition subsystem capacity to scale & composit 4kp30 video
- Main CPU capacity to manage the above
- Power supply & management capacity to support 4kp30 - including battery
- Cost of software to manage all this.
A fancy ISP is no use without a driver co-developed with the RTL ("hardware").

I'd attribute another $10-ish of BOM to cameras, for maybe $35 or about 13%.

It's probably in the ball-park of what the parts for a small-sensor compact camera cost, as remember they still need a processor, screen, case, controls and if you work backwards from the selling price you're not likely to get more than $26 for sensor+lens.

Speak sweet about me, speak evil about me, but anyway speak of me, that's clearly the hype items policy and in that matter the iphone is king !

You must take into consideration research and development (past , present . future). This can cost millions.

Why are people wondering ? Loudspeakers for example made in China that a distributor would pay 36 usd are sold for 400 to the end consumer in Europe , and those 36 USD are not even the real costs of the speakers ..... many people have no idea....

if i had to guess a meaningful percentage of the utility and importance to the average apple user of the camera part of the i phone i would say it surely is more than about 9 .5% ....sadly for photography the i phone is the defacto and ONLY camera many own and it seems will ever own...

when you spend a total of 26 dollars for a sensor, a processing path ,& a stack of plastic lenses, you end up with a sorry excuse for a camera ..

imagine a proper sensor of 30 to 50 sqmm ? instead of less than18 iphones have which is entirely possible ...... imagine a decent glass lens??? other do it with great success to the embarrassment of the iphone ....apple does the least it can get away with...

to their credit they do alot with that 26 dollars .... i think they've optimized and squeezed every ounce of goodness from their components... and been efficient
and done a good job with things like whit bal...just imagine

a camera worth 50 or 75 usd ....wow, bigger sensor, glass lens?

The best camera in the world only costs $26! Now THAT is a bargain! Well done, Apple.

Cost aside, those "cameras" don't look real impressive.

How's this any different from another industry, like for instance, diamond? You didn't really think that a piece of shiny rock that DeBeers didn't even "make" but just dug off the ground, cut, polished and marketed as the greatest thing since slice bread--is really worth a man's 3-month salary did you?

It's the best $26 camera for sure!

Which is why Tim Cook is Apple's CEO; but there is a huge cost in coming out with a working ecosystem, including a stable, user friendly OS, the right incentives for Apps, filtering and managing them, beyond the device's design and engineering, and the risk of the whole project. How many of these has Samsung aka Kaboom! mastered? Google itself? I don't even use an iPhone, but there needs to be some recognition where it's deserved, particularly for a company who almost went down several times following these notions.

As a comparison, the rumor was that the camera parts for the 41MP camera in the Lumia 1020 cost over $100.

"the total bill of materials for the iPhone 7 with 128GB of built-in memory to be $275. $26..."

This sentence does not make much sense.

EDIT: Maybe because there is a new sentence starting with the $ sign.

Cut. It. In. Half!!!!

What do you mean "high margins"?

They sell it at only 300% of the costs...