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$188 is How Much the iPhone 4 Hardware is Worth

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.

  • proletarian
    i tried to care, but was unable to do so.
    Reply
  • Jerky_san
    And yet they are to cheap to give out a 50 cent rubber case they got made in china.. amazing..
    Reply
  • insider3
    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.
    Reply
  • jitpublisher
    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.
    Reply
  • crazybaldhead
    the most expensive part of the device is the awesome 960x640 3.5-inch Low-Temperature Polysilicon (LTPS) and In-Plane Switching (IPS) display

    Wow, biased much?
    Reply
  • eddieroolz
    Sigh, more Apple news. I have run out of care at this point.
    Reply
  • wotan31
    @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.
    Reply
  • angryfingertips
    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.
    Reply
  • footsoldier
    angryfingertipsAlso 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.
    Reply
  • Clintonio
    wotan31@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.
    Reply