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According to results from a virtual teardown from IHS iSuppli that were made public recently, Apple pays an estimated $207 to build the base model 16GB iPhone 5 (a cost...
09-19-2012, 05:08 AM #1
Report Claims 16 GB iPhone 5 Costs an Estimated $207 to Make
According to results from a virtual teardown from IHS iSuppli that were made public recently, Apple pays an estimated $207 to build the base model 16GB iPhone 5 (a cost slightly higher than last year’s iPhone 4S). The market research company noted in its report that while previously-expensive NAND flash memory prices have dropped, the iPhone 5’s display technology and 4G LTE wireless components brings the build cost up to $207, or $8 more than consumer pricing after wireless carrier subsidies. This is in comparison to last year’s iPhone 4S which was estimated to be $188.
Added up, the iPhone 5 is estimated to have a BOM of $199, while the 32GB model rises to $209 and the 64GB version jumps to $230. With a manufacturing cost of $8 across the line, the final comes out to $208, $217, and $238 for the 16GB, 32GB, and 64GB models respectively. A report last Friday from UBM TechInsights pegged the 16GB iPhone 5’ BOM to be around $168, substantially lower than the IHS estimate. The most expensive part in the iPhone 5 is the new 4-inch display which comes in at $44. According to HIS Senior Principal Analyst, Teardown Services, Andrew Rassweiler:
The iPhone 5 makes a big evolutionary step in technology that we have not seen elsewhere with the use of in-cell touch sensing, most other smartphone LCDs use a completely distinct capacitive touchscreen assembly that is physically separate and placed on top of the display. The iPhone 5 partially integrates the touch layers into the display glass, making the product thinner and reducing the number of parts required to build display that senses touch without the need for a separate capacitive touch layer.
NAND flash continues to come down in price as manufacturing processes for these memory chips become more advanced and because it is the world’s largest buyer of NAND flash, Apple gets preferential pricing. Apple’s massive leverage in this market is reflected in our price estimate.
Source: IHS iSuppli via AppleInsider
Last edited by Akshay Masand; 09-19-2012 at 05:11 AM.
09-19-2012, 05:48 AM #2
I'm sure they took into account the tens of millions of orders for each part which I'll bet Apple pays far less for the parts then these people figure. Take that into account with two dollar an hour labor and they make out just fine.
09-19-2012, 07:57 AM #3
These reports are always so misleading. It's easy to put a price tag on the components & manufacturing costs, but you're forgetting about the millions spent on R&D, the salaries of the employees who worked on it (including the underpaid Foxconn workers) and the "other" expenses incurred in manufacturing (defective units, broken parts, assembly down time, etc.) All those costs have to be recouped one sale at a time.
09-19-2012, 08:52 AM #4
it kind of sucks knowing that to go from the 16g to the 64g, it costs them an extra 31 bucks, but they hike the price up 200 bucks. same manufacturing and everything, just a diff. flash. oh well. thats the price you pay i guess for getting top of the line
09-19-2012, 08:54 AM #5
How many times have we seen these short sighted cost analysis. Dont forget to add in the amortization of hundreds of millions of dollars in design and development costs. It would be great if you could just snap your fingers and all of a sudden you have this wonderful product you were selling and you only had to account for the actual cost of it's components...
09-19-2012, 08:55 AM #6
09-19-2012, 09:17 AM #7
Does anyone know the estimated cost for that Galaxy S3?
09-19-2012, 09:50 AM #8
09-19-2012, 10:32 AM #9
09-19-2012, 10:36 AM #10
09-19-2012, 11:33 AM #11
I hope Apple gets rid of the 16GB iPhone starting next year, and begin with 32GB @ $199. More value for our hard earn dollars. Extra $100 for a measly 16GB is a very bad deal.
Last edited by xclusiveiphone; 09-19-2012 at 11:45 AM.
09-19-2012, 12:41 PM #12
Don't forget about logistics costs, and advertising, and lawsuits, etc...
It's not where you've been, or where you're going..
It's where you are.
Reflect on the past, plan for the future, mod for today.
09-19-2012, 04:29 PM #13