"A big heatwave came out of the car.
"Ash was coming from inside the pants. Once you unwrapped the pants, the phone was just melting inside of it."
He shook the phone, which costs more than a $1,000 new, out of the burning clothes and filmed the smouldering remains of his handset.
"Here's the phone - total burnout," the surf instructor can be heard saying in the recording.
Jones insists he bought the phone a week ago and that he has not damaged it or used a dodgy charger.
An Apple spokeswoman told Daily Mail Australia that the company was in touch with Jones and that it had launched an investigation.
It is possible for lithium-ion batteries - the kind used in iPhone 7s - to catch fire when exposed to heat.
The incident comes after Samsung axed its Galaxy Note 7 phone after a number of the devices overheated and burst into flames. The decision could cost the firm US$19 billion.