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iPhone 5 Component Costs Estimated to Begin at $199

IHS iSuppli has released its estimate of the component costs involved in building the iPhone 5, performing a virtual teardown based on information revealed by Apple and industry knowledge. The estimate, which does not include numerous other costs involved in product development, manufacturing, and sales, such as research and development, software, patent licenses, marketing, and distribution expenditures, pegs the component cost of the entry-level 16 GB iPhone 5 at $199.
The new iPhone 5 carries a bill of materials (BOM) of $199.00 for the low-end model with 16Gbytes of NAND flash memory, according to a preliminary virtual teardown conducted by the IHS iSuppli Teardown Analysis Service. When the $8.00 manufacturing cost is added in, the cost to produce the iPhone 5 rises to $207.00. For the 32Gbyte version of the iPhone 5, the BOM cost increases to $209.00, while 64Gbyte version is estimated at $230.00, as presented in the table below.

The estimated $199 bill of materials (BOM) for the 16 GB model is slightly higher than the firm's $188 estimate for the iPhone 4S at that device's launch last year, but a halving of flash storage prices over the past year means that Apple's margins improve as capacity increases. While the 32 GB and 64 GB models of the iPhone 4S carried BOMs of $207 and $245 respectively, those estimates move to $209 and $230 for the iPhone 5.
While the price of some components, such as NAND flash, has fallen during the past year, the iPhone 5’s overall BOM has increased mainly because its display and wireless subsystems are more expensive compared to the iPhone 4S.”
Compared to the iPhone 4S, flash storage pricing declined by roughly $10 on the entry-level iPhone 5, but that decrease was more than offset by a $7 increase in display costs to $44 due to the adoption of in-cell touch sensors and a $10 increase in wireless costs with the move to Qualcomm's latest LTE-compatible chips. At the 64 GB level, a $37 decrease in flash memory compared to the iPhone 4S is able to overcome the other increases to lower Apple's overall estimated costs for the device.

Related roundup: iPhone 6

Top Rated Comments

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28 months ago
I know it's been said a million times already (but I'll say it again) but man, it really bites that Apple charges an extra 200 bucks for additional memory that costs them 30 bucks.
Rating: 36 Votes
28 months ago

Pass on some of those savings you greedy corporate shysters.


Dont talk crap.

How much do you think R&D, manufacturing, assembly, import taxes for respective countries etc etc etc yada yada cost?
Rating: 17 Votes
28 months ago
If you're hiring someone to build and install a fence on your property, and they quote you 5 days time at $3,000.... then you point out that the wood and nails only cost $400, are they ripping you off?

Cost of materials is not the complete cost of anything. Maybe Apple should sell a do-it-yourself iPhone kit for $200, and see if any of you can put it together?
Rating: 14 Votes
28 months ago
Pass on some of those savings you greedy corporate shysters.
Rating: 13 Votes
28 months ago
As a shareholder pricing means great profit and great return on my investment.

As a customer for only $10 difference between 16gb and 32gb, Apple should have just made the 32gb iPhone the entry $199 price and discontinue the 16gb phone. And make 64gb $299.
Rating: 13 Votes
28 months ago

R&D has no cost. They pay minimum wages to employees to research and develop new technology. There are no extra expenses to this.


What planet do you come from?
Rating: 11 Votes
28 months ago

I know it's been said a million times already (but I'll say it again) but man, it really bites that Apple charges an extra 200 bucks for additional memory that costs them 30 bucks.


Agreed

For me the worst development of recent times has been the move to soldered in memory and almost impossible to upgrade SSD in the laptop range - it has given Apple the power to gouge us for memory and storage - when previously you'd have had to be insane to buy Apple laptops with large memory and storage provided by Apple - much cheaper of course to do it yourself.
Rating: 8 Votes
28 months ago

I know it's been said a million times already (but I'll say it again) but man, it really bites that Apple charges an extra 200 bucks for additional memory that costs them 30 bucks.


This is the sole reason I'm avoiding the iPhone 5. Come on. Just make 32 GB the base model for $199 already.
Rating: 8 Votes
28 months ago
Keep in mind, this doesn't include the cost of R&D, labor, patents, marketing, etc. Those all add up. I'm not saying that Apple isn't making money hand over fist as their stock price indicates they clearly are.
Rating: 8 Votes
28 months ago
LOL... 10 bucks more for 32 gb, yet 100 bucks more for us. Those cheeky bastidges.... :p
Rating: 7 Votes

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