New in OS X: Get MacRumors Push Notifications on your Mac

Resubscribe Now Close

iPhone 4S Component Costs Once Again Begin at About $188

Thursday October 20, 2011 8:17 am PDT by Eric Slivka

AllThingsD reports on IHS iSuppli's teardown analysis of the iPhone 4S, with an eye toward estimating the cost of components included in the device. Based on iSuppli's analysis, the 16 GB iPhone 4S carries a bill of materials cost of about $188, in line with that of the GSM iPhone 4 at launch.
In the case of the iPhone 4S, [IHS iSuppli analyst Andrew] Rassweiler estimates that the BOM cost ranges from $188 for the 16 gigabyte version of the iPhone 4S to $207 for the 32GB version and $245 for the 64GB version. Apple and its carrier partners sell the phones for $199, $299 and $399 respectively, typically with a two-year contract for wireless service that carriers use to subsidize the cost they pay Apple.
While we've already seen a couple of iPhone 4S teardowns from iFixit and Chipworks, IHS iSuppli highlights a few new items of note.

- A noise cancellation chip from Audience that had been included in the iPhone 4 is not found in the iPhone 4S, suggesting that the noise cancellation functions may have been incorporated directly into the main A5 system-on-a-chip. IHS iSuppli estimates that the A5 chip, which continues to be manufactured by Samsung, costs Apple about $15.

- While iFixit found Toshiba flash memory in its iPhone 4S unit, IHS iSuppli expressed some surprise at finding Hynix memory in its unit. Apple has, however, sourced flash memory for various devices from Hynix for many years, although the company's products have apparently not been seen in recent iPhone models. But with flash memory being a relative commodity in the hardware market, Apple typically sources the chips from a variety of vendors based on pricing and volume requirements.

- IHS iSuppli was unable to determine the manufacturer of the iPhone 4S camera module, as the part contained no identifying information printed on it. Chipworks had determined in its teardown that the camera sensor was made by Sony, but it is unclear if Sony is splitting sensor production loads with Apple's longtime partner OmniVision. Regardless, IHS iSuppli estimates the cost of the camera module at $17.60.


Component costs for Apple's entry-level iPhones have typically come in between $170 and $190, offering the company a hefty margin when the $199 purchase price and extensive carrier subsidies are accounted for. But it is important to note that bill of materials cost estimates account only for the cost of the individual hardware components used in the device. The estimates do not include other costs involved in product development, manufacturing, and sales, such as research and development, software, patent licenses, marketing, and distribution expenditures.

Tag: IHS iSuppli
[ 104 comments ]


Top Rated Comments

(View all)

Avatar
rdowns
100 months ago

They make a almost $461 dollars on ONE 16gb 4s? Wholly *****! :eek:

$542 on 32gb

$604 on 64gb



Uh, no. This is simply the cost of parts. It doesn't include manufacturing costs, patent/royalty costs, marketing, R&D, packaging etc.
Rating: 10 Votes
Avatar
mastershakess
100 months ago

That isn't a very good margin at all. Most companies aim for an 8-10x margin, not 3.


Where did you get that incorrect fact from?
Rating: 10 Votes
Avatar
ndpitch
100 months ago

They make a almost $461 dollars on ONE 16gb 4s? Wholly *****! :eek:

$542 on 32gb

$604 on 64gb



No, Apple also has to pay the manufacturers to build it. They have to pay for all the advertising and marketing that's gone into it. They also have to pay for the initial research, development, testing, etc.

There are much more costs involved than just the parts to make it.
Rating: 8 Votes
Avatar
acfusion29
100 months ago

Not to mention R&D, shipping, advertising, software development, etc, etc, etc.


what are you talking about????? those things actually cost money? :eek:
Rating: 7 Votes
Avatar
ndpitch
100 months ago

Where did you get that incorrect fact from?


Agreed. That "fact" can't be more false.
Rating: 6 Votes
Avatar
chrmjenkins
100 months ago

Nobody wants that much internal storage. SD card does the exact same thing for a fraction of price. 16GB costs $200 on contract which is reasonable. $400 for 64GB is twice the cost of 16GB which is too much.


I think I'll let the market speak rather than take your opinion of what the market wants.
Rating: 6 Votes
Avatar
kyjaotkb
100 months ago

They make a almost $461 dollars on ONE 16gb 4s? Wholly *****! :eek:


yeah, cause they have this particularity of being a company with only 2 lines in their P&L. Crazy stuff, huh?
/s
Rating: 5 Votes
Avatar
JRoDDz
100 months ago

There's not that much more cost of the 4s than the components cost, because the 4s is the 4 with a few components upgrade. If Apple can make phones that are affordable, why jack up the price so much forcing us to get subsidized phones from carriers?:mad: Nobody wants a locked down phone.


How about you purchase all the parts yourself, and assemble it yourself, and write your own operating system and apps? See how much that's going to cost you.
Rating: 5 Votes
Avatar
MonkeySee....
100 months ago
If you want something cheap, go to ikea. If you want quality, go to a carpenter.

Same rules apply here.

I've never felt ripped off buying Apple. :apple:
Rating: 5 Votes
Avatar
vdoc
100 months ago

Thank you for personal insult. Sorry I only speak 3 languages but not perfectly.

With iCloud and iTunes match and other streaming of media, the decision to pay for more memory is more silly.

If Apple wanted, they can make 32gb the low end and put more pressure on android makers with little effect on margin. But you do not see this. Surprise.


I took the people who buy 32gb and 64gb are not smart as an insult too so it was a tongue in cheek comment. There are hundreds of other products in the marketplace that follow this pricing strategy. I could say people who buy fully loaded version of a car over a base model are not smart. To each is own and what is important to one is not important to another.

It is called perceived value. The market determines the price.
Rating: 4 Votes

[ Read All Comments ]