$188 is How Much the iPhone 4 Hardware is Worth
That's just the hardware, not including the software and other related R&D.
The iPhone 4's pricing is no different than it's been in for the past two generations -- $199 for one, and $299 for double the storage. But what's different now is the cost.
According to teardown firm iSuppli, the 16GB iPhone 4 costs an estimated $187.51 on the bill of materials. That's just for the component parts only, not including the packaging and shipping. The software costs and R&D investment are also additional to Apple's costs. But in terms of just raw materials, those signing up for the iPhone 4 at $199 are getting almost exactly what they're paying for.
"Just as it did with the iPad, Apple has thrown away the electronics playbook with the iPhone 4, reaching new heights in terms of industrial design, electronics integration and user interface," said Kevin Keller, principal analyst, teardown services, for iSuppli. "However, the BOM of the fourth-generation model closely aligns with those of previous iPhones. With the iPhone maintaining its existing pricing, Apple will be able to maintain the prodigious margins that have allowed it to build up a colossal cash reserve—one whose size is exceeded only by Microsoft Corp."
The iPhone 4 turns out to be the second most expensive iPhone yet. iSuppli estimated the BOM of the 3GS in 2009 at $170.80; the 3G in 2008 at $166.31 and the first iPhone in 2007 at $217.73.
Not surprisingly, the most expensive part of the device is the awesome 960x640 3.5-inch Low-Temperature Polysilicon (LTPS) and In-Plane Switching (IPS) display, followed closely by the 16GB of Samsung MLC NAND flash.
Check out the list below for the full breakdown.
- Gravity Vehicle Promises Better Parking
- Disco Flesh: A Lightshow in a Chair
- iOS 4 Causing iPod Touch Battery Problems
- iPhone 4 Appears to be Tougher to Unlock
- Hulu Plus On PS3 Requires PlayStation Plus?
- Symbian Lover: "Nokia is Losing Hard"
- Iron Man Biker Suit Finally Out and for Sale
- Concept PMP Features Roll-Out Piano
- The Xbox BP Oil Spill Game
- MIT Develops Smartphone App to Test Your Eyes
- Another One Bites the Dust: T-Mobile Kills Sidekick
- Verizon Gives HTC Incredible Customers $25
- Fix Your iPhone 4 Reception Woes for a Dollar
- Robot Garbage Man Only Comes When Called
- Lots of People Suing Apple for iPhone 4 Reception
- Yet Another Droid Incredible Battery Life Fix
- Artist Creates Portraits With iPad Brushes App
- Desktop Earth: Real-Time Satellite Wallpapers
- Any Video Converter Coverts Videos in Bulk
i tried to care, but was unable to do so.
And yet they are to cheap to give out a 50 cent rubber case they got made in china.. amazing..
You aren't getting what you pay for when you are on a crappy network that wants $2500 for the next two years. Besides, the iPhone4 unlocked is around $600 if I'm correct. So that's around a $400 profit....getting what you pay for my ass.
Okay, here we go again. They are not making $400 profit. Do you see the little words at the bottom of the article? This accounts for only the HARDWARE or MATERIAL cost to build the thing. These articles do not account for LOH (labor and overhead)Which accounts for pretty much everything else required to get this product to market after you buy the parts. Labor and overhead most usually runs at a much higher percentage of the product cost than the materials. But unless you are in the manufacturing business, you probably don't think about or realize just how big those costs are.
Wow, biased much?
Sigh, more Apple news. I have run out of care at this point.
@insider3 you couldn't be more wrong. Apple is absolutely NOT making $400 profit on each phone. "Worth" and "Cost" are two very different things. The iPhone *costs* $188 in parts, to manufacture. That does not include the cost of labor to build the phones. That does not include all the research and development to design the thing. That does not include the cost of software development to design the software that it runs. That does not include the cost of marketing to advertise the thing. That does not include the cost of running a retail sales operation (i.e. Apple Store) to sell the thing. That does not include the cost of all the regulatory testing and approval to sell the thing in each country where its sold. I don't even like the iPhone 4, but please, you have absolutely no concept of cost and profits.
Also this is a an "estimated cost" of materials. They might be cheaper or more, since this is just a best guess. Most of the time we think the Chinese work for free, but in reality they don't and they do get paid. Microsoft charges 160 or so for a copy of Windows 7 disc that is made in Mexico. Cost of the disc is what 1 or 2 cents. We seen to forget the other overhead when someone makes something. And yes, Apple is in this to make money and as much as they can. As long as people are willing to pay it, the price will hold firm.
Also this is a an "estimated cost" of materials. They might be cheaper or more, since this is just a best guess. Most of the time we think the Chinese work for free, but in reality they don't and they do get paid. Microsoft charges 160 or so for a copy of Windows 7 disc that is made in Mexico. Cost of the disc is what 1 or 2 cents. We seen to forget the other overhead when someone makes something. And yes, Apple is in this to make money and as much as they can. As long as people are willing to pay it, the price will hold firm.
Agreed. People tend to forget Microsoft charges more crazily for their software.
@insider3 you couldn't be more wrong. Apple is absolutely NOT making $400 profit on each phone. "Worth" and "Cost" are two very different things. The iPhone *costs* $188 in parts, to manufacture. That does not include the cost of child labor to build the phones. That does not include all the research and development to design the thing. That does not include the cost of software development to design the software that it runs. That does not include the cost of marketing to advertise the thing. That does not include the cost of running a retail sales operation (i.e. Apple Store) to sell the thing. That does not include the cost of all the regulatory testing and approval to sell the thing in each country where its sold. I don't even like the iPhone 4, but please, you have absolutely no concept of cost and profits.
Fixed.
Also, the real rip off is the contract price. You end up paying far more than you would if it was unlocked and new. As for R&D, it'll cost a fortune, but I guarantee you're still being overcharged.
Why do so many people dislike the iPhone on this site?
I wonder how much "phone" people are getting when they sign a 2 year contract and paid $200 for their Android phone. All Android devices so far are kinda cheap with off-the-shelf components and plastic parts.
I wonder how much "phone" people are getting when they sign a 2 year contract and paid $200 for their Android phone. All Android devices so far are kinda cheap with off-the-shelf components and plastic parts.
Droid Incredible cost breakdown was 187.75 for the materials. I don't have a smart phone like one of these, so I cant really talk about which one would have more quality parts.
Why do so many people dislike the iPhone on this site?
Anandtech is for regular/mainstream gamers. Tom's is finding its niche in AMD/ATI and anti-Apple people.
The quality of articles and speed of news pretty much reflects this. Engadget + Anandtech pretty much provides 5 times the review and sneak peek you get at Tom's with less spelling mistake. In fact, Tom’s “news” is exactly one day late than Engadget.
Droid Incredible cost breakdown was 187.75 for the materials. I don't have a smart phone like one of these, so I cant really talk about which one would have more quality parts.
Good to know. I guess the AMOLED on the Incredible cost about the same as iPhone's IPS display.
i read somewhere that it was $800 well they were way off
Aooooo... My iPhone never had as many bars as Apple said.... Yeah... Sure... This was an oversight....
http://money.cnn.com/2010/07/02/te [...] n&hpt=Sbin
i have to say i like seeing the brakedown of price for all the parts in the phone. Should happen more often imo
Wow enough of the anti-apple comments. This site completely blew the reception issue out of the water, with bad journalism. Some gent was nice enough to show a accurate article will actual readout of reception. That is good journalism.
@pei-chen
thanks for a different place to get my news. I am sick and tired of this biased, half talent reporting.
@tomshardware
This is me signing off for a different site. Too many times their isn't real news here, just a bunch of immature people arguing about things that have nothing to do with news.
If smells like crap, looks like crap, and it feels like crap..... what is it..... you get the point. On to better journalism.
I think a lot of people also forget about is the development and advertisement costs they throw into a products price plus that bit for profit on top, but with apples history of selling you a pc for 8 grand that's only built with 1.5 grand in parts then its not really forgivable especially when they don't even innovate in terms of hardware, especially when the iphone 4 does not even work properly. (cant call the ipad an innovation its just a glorified iphone without calling functions)
@tank if you think there isn't Apple bashing going on other sites like Anandtech you are in for a rude awakening, LOL. The feeling toward Apple on the forums/user comment sections is the same on most the tech sites I've seen recently.
And yet they are to cheap to give out a 50 cent rubber case they got made in china.. amazing..
I wonder the same thing.
People always forget to take into account that Apple purchases thousands of components at ocne, and gets them for half what a single component costs.
Okay, here we go again. They are not making $400 profit. Do you see the little words at the bottom of the article? This accounts for only the HARDWARE or MATERIAL cost to build the thing. These articles do not account for LOH (labor and overhead)Which accounts for pretty much everything else required to get this product to market after you buy the parts. Labor and overhead most usually runs at a much higher percentage of the product cost than the materials. But unless you are in the manufacturing business, you probably don't think about or realize just how big those costs are.
Divided across the 2 million they already sold, or the 10+ million they will sell before the next device comes along? Considering they are likely grossing more than 300 a unit when they sell them to AT&T, by the time they get to 10 million handsets the profit is going to be terrific. And who knows what kind of per dollar kickback Apple is getting for giving exclusivity to AT&T... Don't worry, they wont be going hungry any time soon.
Agreed. People tend to forget Microsoft charges more crazily for their software.
No one is forgetting how much other companies overcharge us, but this is an Apple article and people are going to talk about Apple here, not MS.
People always forget to take into account that Apple purchases thousands of components at ocne, and gets them for half what a single component costs.
LOL, yes, iSuppli went to their local Radio Shack and took these prices off of the parts on the shelf... Please tell me you're joking.
That sounds about right so volume pricing on 100,000 units minm. order would be 30% that cost at most.
Apple sold about 2milj. phones or close to doing that amount that means they get 5 milj. unit pricing = 4.5% of iSuppli pricing for a projected 10 milj. phones to be sold in 6 to 8 months conservatively.
You would think that retard Apple would allow you to democratically own what you bought and use what service provider / pay as you go service in this junk but they are above Democracy / the common small people's version of the law.
Same with software / porn I own my hardware I will put what I want on it when I want or is this opposite of what that lost forgotten article is about the "USA constitution"
Maybe UK people has enough guts / b*lls to get Apple to allow users to do what they want when they want, at least there is still law and justice in UK.
Why do so many people dislike the iPhone on this site?
Probably for the same reason whenever there's a MS article you get a load MS haters or an Android article you get anti-android folks. People like to puff themselves up big to and talk about how the other side sucks in order to justify their own purchasing decisions and how every one who differs in opinion is wrong and on the losing team. Of course, the whole 'I'm better than you cause I own X and you only own Y' is a stupid argument to begin with.
That sounds about right so volume pricing on 100,000 units minm. order would be 30% that cost at most.Apple sold about 2milj. phones or close to doing that amount that means they get 5 milj. unit pricing = 4.5% of iSuppli pricing for a projected 10 milj. phones to be sold in 6 to 8 months conservatively.You would think that retard Apple would allow you to democratically own what you bought and use what service provider / pay as you go service in this junk but they are above Democracy / the common small people's version of the law.Same with software / porn I own my hardware I will put what I want on it when I want or is this opposite of what that lost forgotten article is about the "USA constitution"Maybe UK people has enough guts / b*lls to get Apple to allow users to do what they want when they want, at least there is still law and justice in UK.
Huh? You lost me on that one. Let me clear this up right quick for all of the questions about the BOM and the total cost. iSuppli doesn't deal with off the shelf prices, everything they are quoting is in anticipation of the quantities that the product is dealing with (i.e. 1M+ pieces) and their cost estimates are the best in the business. Also, as far as manufacturing labor costs go, this usually ranges from 6 to 10 dollars, depending on the country of origin. iSuppli usually includes this cost in their teardown (they did with the iPhone 3GS, and most other smartphones) but in this case they probably are still trying to get a handle on what the recent Foxconn labor upset will do to costs, since allegedly Apple is eating up some of the cost to guarantee higher wages for the workers.
Are we done here?
You aren't getting what you pay for when you are on a crappy network that wants $2500 for the next two years. Besides, the iPhone4 unlocked is around $600 if I'm correct. So that's around a $400 profit....getting what you pay for my ass.
development cost? marketing cost? the apple police?(the ones that go and tell you that you are a thief and raid your house,they cant be cheap. xD)
Blaming a mayor antenna/reception flaw on the software that displays the status $0...because life greatest **** ups are free.
Okay, here we go again. They are not making $400 profit. Do you see the little words at the bottom of the article? This accounts for only the HARDWARE or MATERIAL cost to build the thing. These articles do not account for LOH (labor and overhead)Which accounts for pretty much everything else required to get this product to market after you buy the parts. Labor and overhead most usually runs at a much higher percentage of the product cost than the materials. But unless you are in the manufacturing business, you probably don't think about or realize just how big those costs are.
I work in manufacturing and if you have ever built anything you would know that material is, on average, about 60-65% of the cost with labor & overhead accounting for the rest. At most, software, labor, & overhead included... the iPhone 4 costs $300. Still a cool $300 profit for Apple.