At $207, it costs Apple just $20 more to build a 16GB iPhone 5 compared to the iPhone 4S

At $207, it costs Apple just $20 more to build a 16GB iPhone 5 compared to the iPhone 4S
IHS iSuppy have done a virtual teardown of the Apple iPhone 5, and they are the establishment that does Bill of Materials (BOM) estimates with confidence. There was one other preliminary BOM estimate before, at $168, which we notes sounds suspiciously low to us, considering this is the third year since a thorough redesign, bringing with it a new chassis.

Indeed, IHS iSupply estimates that the components in the iPhone 5 cost Apple $207 to build the handset, higher than the $188 of the iPhone 4S last year, which was using the body of the iPhone 4. The difference comes from the sophisticated multiband LTE radio from Qualcomm that costs $34 now, compared to $24 for the iPhone 4S radio, and, of course, the screen, which uses the novel in-cell touch packaging, costing $44 to Apple, due to the complicated production tech and low yields. Samsung has been using similar packaging, called on-cell, for its Super AMOLED displays since the first Galaxy S, and in-cell is the next step in that evolution.

Hence, Apple won't make as much money from the iPhone 5 as it did from the iPhone 4S last year, but with time display yields will improve, the component prices will fall, and Apple will still be selling it north of $600 to carriers and consumers alike. Plus, it is not that a $20 difference to build the iPhone 4S when it launched last year, compared to the iPhone 5 now, will knock the bottomline off-kilter, considering how much more iPhone 5 units will sell due to the redesign and the LTE connectivity. As for the LTE radio inside, IHS confirms out analysis on the carriers that will be compatible with the iPhone 5:



So, to a $207 BOM, which includes manufacturing, we have to add Apple's operating expenses like Selling, General&Administrative and Research&Development, which historically hover a bit below 10% of the revenue. 

Assuming $649 ASP for the iPhone 5, we get at around $270 total cost per iPhone, which still leaves Apple with about 140% profit per unit, and we are talking about the least expensive 16GB version here - on the 32GB and especially the 64GB units Apple makes much more. Well, it is not exactly cocaine profit margins, but still remains the most profitable piece of electronics in history.

source: IHS

Related phones

iPhone 5
  • Display 4.0" 640 x 1136 pixels
  • Camera 8 MP / 1.2 MP front
  • Processor Apple A6, Dual-core, 1300 MHz
  • Storage 64 GB
  • Battery 1440 mAh(8h 3G talk time)

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15 Comments

1. Kronic

Posts: 321; Member since: Sep 11, 2012

High profits!!! Apple is very good at what they do!!!

6. doejon

Posts: 411; Member since: Jul 31, 2012

no.., apple is good in fooling isheeps ahm.. sorry i mean people ;-)

8. doejon

Posts: 411; Member since: Jul 31, 2012

this will be the first fragmentation of apple :-) remember what tim said: “One thing is that we’re not fragmented. Look at the percentage of users who upgraded to iOS 5. We have one App Store. We have one phone with one screen size, one resolution. So it’s pretty simple if you’re a developer.”

13. jimjam unregistered

Good at charging high mark ups.

2. phil2n

Posts: 519; Member since: Apr 30, 2012

yup.. they are very good in profits.. nevermind about their product.

3. wendygarett unregistered

Can you please take my money Apple?

4. jshan

Posts: 200; Member since: Dec 25, 2011

If you want buy an apple iPhone .. Then of caurse they have to take your money .. If you won't buy don't warry they would not take up your money !!!! ( don't warry on that ) the bottom line is they aren't taking money from anybody .. They just selling products and if u wanna buy they do the business that's all.. Simple like nothing !! ( and we call it as a deal )

5. Charlie_Appletree

Posts: 1; Member since: Sep 19, 2012

are you a retard?

9. jshan

Posts: 200; Member since: Dec 25, 2011

Sorry ?? I won't BOTHER u man !! :)

12. -box-

Posts: 3991; Member since: Jan 04, 2012

@charlie: Not everyone here natively speaks English, and not everyone has a college degree in English either. Also, asking if someone is "a retart" is highly insensitive, and those that would be answering the question in the positive are likely unable to do so or would not be aware of that terminology for their condition/existence.

7. jibraihimi

Posts: 801; Member since: Nov 29, 2011

Woow the price difference between makin cost of 16GB iPhone 5 and 64 GB iPhone 5 is only 31$, but the difference in their selling price is 200$. Apple really knows how to rob it's customers............

10. jshan

Posts: 200; Member since: Dec 25, 2011

U can't call it as "ROB" cz they aren't stealing anything, they are just pricing their products in the way they want to... And people's who needs that demand and quality ,they gonna buy it on their own favors... No one stealing by any one //// BUT ANDROID ... ????

11. pikapowerize

Posts: 1869; Member since: May 03, 2012

wow... this is really expensive!! oh well it is apple for crying out loud!

14. DonkeySauce

Posts: 194; Member since: Dec 03, 2011

And people complain about having to pay $199.99 for them. I always explain to customers that we loose money on every phone I sell them, but they never believe me. They always say something like "That phone couldn't cost that much. It can't cost more than 50 bucks to make" etc etc etc.......

15. Schmao

Posts: 365; Member since: Jul 05, 2009

Of course they don't have to pay much more. The iPhone is the same as it was last year, and the year before. No suprises.

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