IHS iSuppli


'IHS iSuppli' Articles

iPhone SE Component Costs Estimated to Start at $160

Component costs for the new 16GB iPhone SE are estimated to be at about $160, according to a preliminary teardown report from IHS iSuppli. When a new iPhone is released, IHS often takes it apart to estimate the cost of each component to ultimately predict how much Apple spends on hardware. IHS estimates that the materials for the device cost $156.20, rounded up to $160 with the addition of manufacturing costs. Apple is believed to have kept the base cost of the iPhone SE relatively low by using a number of parts designed for the iPhone 5s, 6, and 6s, allowing the device to be sold to consumers at a $399 starting price due to price drops on the original components. For example, the Gorilla Glass display in the iPhone SE is estimated to be one of the most expensive components, coming in at a price of $20. When that display was originally used in the iPhone 5s, it was more than twice as expensive. When the iPhone 5s was released in 2013, in fact, its costs were estimated to be at $199 and with Apple's most recent flagship iPhone 6s Plus, component costs were estimated to start at $236. When it comes to the 64GB iPhone SE, IHS estimates that Apple is making an additional $89 per device over the 16GB iPhone SE, due to the relatively low cost of memory upgrades."Apple is willing to drop its gross margin on the low end to induce sales -- though it is likely counting on many consumers upgrading to the more profitable 64 gigabyte SE model," said Wayne Lam, principal analyst, mobile devices and networks, IHS Technology. "When the profit machine that is Apple capitulates

iPhone 6s Plus Component Costs Estimated to Begin at $236, $16 More Than iPhone 6 Plus

IHS iSuppli has once again taken apart the newest set of iPhones in an attempt to come as close as possible to estimating the actual component cost of the new devices. According to IHS iSuppli's teardown of the iPhone 6s Plus, the bill of materials for a 16 GB version comes to $231.50, with manufacturing costs and other minor items raising the overall price slightly to $236. One of the biggest areas of increased cost is related to 3D Touch, which adds about $10 to the overall component cost of the iPhone 6s Plus when combined with Apple's Taptic Engine used to fuel the new feature. It's these improvements that have boosted the new iPhone 6s Plus to cost around $16 more to manufacture than last year's iPhone 6 Plus, according to IHS Technology senior director of cost benchmarking services, Andrew Rassweiler.“3D Touch and Apple’s Taptic engine are among the more notable feature upgrades found in this latest round of iPhones,” said Rassweiler. “With each generation the company makes measured, incremental technology improvements to its iPhone line, and this time around those changes are increasing Apple’s per-unit material cost.” Overall, the most expensive aspect of the new iPhone 6s Plus is its display, with the addition of 3D Touch slightly increasing the component cost to $52.50 this year. Other high-cost components include the iPhone's new 12-megapixel rear camera and 5-megapixel front-facing camera that together are estimated to cost $22.50, and the A9 chip at $22.00. IHS also points out the incremental cost differences between each step-up in memory capacity,

Apple Watch Sport Component Costs Estimated at $83.70, Which Won't Sit Well With Tim Cook

IHS iSuppli often tears down devices to estimate component costs, and today, the research firm released its report on the Apple Watch, suggesting it has the lowest hardware costs compared to retail price of any Apple product IHS has researched. The 38mm Apple Watch Sport dissected by IHS was estimated to cost $81.20 when broken down by component. In IHS' estimation, the most expensive component in the Apple Watch is the display (including OLED and Ion-X cover glass), priced at $20.50, followed by the processor on the S1 chip, priced at $10.20. In addition to component costs, IHS adds an estimated $2.50 for manufacturing costs, bringing its total estimate for the Apple Watch's raw cost to $83.70. IHS did not give similar cost breakdowns for the stainless steel or gold Apple Watches, both of which have sapphire cover displays and different casing materials. At $83.70, IHS says the hardware costs of the Apple Watch are "only about 24 percent" of the manufacturer's suggested retail price of $349, while other Apple product component costs have ranged from 29 to 38 percent, giving the Apple Watch a higher potential profit margin. During Apple's most recent earnings call, the company announced that Apple Watch profit margins would actually be slimmer than other Apple products, at least during its first quarter of availability."It is fairly typical for a first-generation product rollout to have a higher retail price versus hardware cost," said Kevin Keller, senior principal analyst-materials and cost benchmarking services for IHS Technology. "While retail prices always

Tim Cook: Component Cost Breakdowns on Apple Products Are Nowhere Close to Being Accurate

During today's Q2 2015 earnings call, Apple CEO Tim Cook noted that Apple Watch margins are lower than the company average, and on a followup question about those margins in the context of the Apple Watch Edition's high price, Cook commented on the inaccuracy of estimated cost breakdowns on Apple products. "I haven't seen [them for Apple Watch], but generally there are cost breakdowns around our products that are much different than the reality. I've never seen one that is anywhere close to being accurate," Cook said. He went on to say that the Apple Watch's functionality is "absolutely incredible" with a lot of new features and innovative technology. We haven't seen cost breakdowns on the components of the Apple Watch hinting at a possible base unit price that would reveal Apple's profit margin, but such component breakdowns are often shared by analysts following device teardowns. The iPhone 6 and 6 Plus, for example, were estimated to have a parts and labor cost of approximately $200, resulting in a 69 percent gross profit margin based on the device's $649 base selling price. iPhone 5s component cost was estimated to begin at $199, and iPad Air component cost was estimated to begin at $274. All of these estimates, which come from IHS iSuppli, include only part costs, leaving out other expenses like research and development, software creation, marketing, and distribution, which may explain Cook's comments on inaccuracy. According to Cook, it's "intuitive" that Apple Watch margins would be lower than the company average during the first quarter, as the first

iPad Air 2 Material Costs Hold Steady Starting at $275, but New Storage Tiers Erode Profit Margin

As it always does with Apple's major new iOS devices, research firm IHS iSuppli has torn down the new iPad Air 2 in an attempt to estimate Apple's component costs for the device (via Re/code). According to IHS iSuppli's estimates, the 16 GB iPad Air 2 costs Apple roughly $275 to build, just one dollar more than last year's iPad Air. The report unsurprisingly points out that Apple benefits from stronger profit margins as users move to higher capacity models, with Apple paying only about $50 more for 128 GB of storage compared to the base 16 GB configuration while charging users $200 for the upgrade. Still, Apple's move to eliminate the 32 GB option and slide the 64 GB and 128 GB models down $100 has slightly eroded Apple's profit margins at the top end.The latest report from the research firm IHS, due later today and shared exclusively with Re/code, shows that the base model of the iPad Air 2, the 16-GB Wi-Fi version, which sells for a price of $499, costs $275 to build, exactly one dollar higher than the previous base model. The top-end model, the 128-GB LTE version costs which sells for $829 costs $358. Apple’s implied profit margin on the iPad Air 2 has dropped slightly to a range for 45 percent to 57 percent depending on the device, compared with the original at 45 percent to 61 percent.Many of the components have remained the same between the iPad Air and the iPad Air 2, with Apple's use of essentially the same display unit allowing the company to reduce costs of that component from $90 to $77. But with Apple's move to bond the display to the device's cover

iPhone 6 Component Costs Estimated to Begin at $200, Samsung Supplying Some A8 Chips

As it routinely does for new devices, IHS iSuppli has taken apart the iPhone 6 and iPhone 6 Plus in an effort to estimate Apple's costs for the components included in the new devices, sharing the results with Re/code. According to IHS iSuppli's teardowns, parts and labor costs for the iPhone 6 are estimated to begin at $200 for the 16 GB iPhone 6 model, giving Apple a roughly 69 percent gross profit margin on the devices. That number of course does not take into account an array of other costs, from research and development to software to marketing and distribution, but it does offer an interesting glimpse at what goes into an iPhone.The margins are in line with more recent iPhone models but higher than the earliest ones. The gross margin on the iPhone 5, released in 2012, and the iPhone 5s, released last year, were about 69 percent, teardown studies at the time of their release showed. On the lower-priced iPhone 5c, also released in 2012, the gross margin was closer to 68 percent. By comparison, the gross margin on the very first iPhone, released in 2007, was closer to 55 percent.Apple does earn slightly higher margins on higher-capacity iPhone 6 models, as the 128 GB of storage is estimated to cost $47 more than the base 16 GB storage while the device retails for $200 more. The iPhone 6 Plus is also a higher-margin item for Apple, with IHS iSuppli estimating the device costs just $16 more to produce than the corresponding iPhone 6 models, with roughly half of that difference coming from the display and the remainder presumably related to the rear camera module with

Shipments of Retina iPad Mini Likely to Double in Q1 2014 as Shortages Ease

Shipments of the supply-constrained iPad mini with Retina display are likely to double in Q1 2014, according to market research firm IHS iSuppli (via CNET) and KGI Securities analyst Ming-Chi Kuo, with both stating that the estimated shipment of 2 million Retina iPad mini tablets in the current quarter will grow to a total shipment of about 4.5 million devices in the first three months of next year. Rhoda Alexander, director of Tablet and Monitor Research at IHS iSuppli, stated the following about the supply constraints surrounding the tablet: Rhoda Alexander told CNET on Tuesday that she expects production of about 2 million Mini Retina tablets in the fourth calendar quarter. "When you think about some of the releases where they sold that many iPads in a weekend," that's not a lot, she said. Meanwhile, Ming-Chi Kuo stated his estimates for a production boost of the tablet, stating that shipments of the Retina iPad mini will increase due to an improvement in manufacturer yield: We maintain our iPad mini R shipments forecast of around 2.2mn units for 4Q13. Considering production yield improvement at the supply chain, we forecast shipments will grow 102% QoQ in 1Q14 to 4.5mn units. But marked shipments growth given the low base in 4Q13 can’t make up for overall iPad shipments in 1Q14. In something of a surprise move, Apple began accepting orders for the Retina iPad mini in the United States and several other countries yesterday, with the device's quiet launch potentially due to constrained supplies. Currently however, availability through Apple's online store

iPad Air Component Costs Estimated to Begin at $274, Roughly 13% Cheaper Than iPad 3

IHS Suppli has released its estimate of the component costs involved in building the new iPad Air, performing a virtual teardown based on information revealed by Apple and industry knowledge. According to IHS estimates, the component cost of the iPad Air is between $274 and $361 depending on the model, with the base model's components actually totaling $42 less than that of the entry-level third generation iPad last year despite significant technology improvements to reduce size and weight while improving performance. IHS iSuppli did not perform a cost analysis on the fourth-generation iPad, which was released in late 2012. The estimates from IHS iSuppli cover only the cost of the various components that make up the device and do not include other costs involved in product development, manufacturing, and sales, such as research and development, software, patent licenses, marketing, and distribution expenditures. The full report has not yet been released but AllThingsD received early access. The bill of materials includes $90 for the display, $43 for the touchscreen components, $18 for the A7 chip manufactured by Samsung, between $9 and $60 for the Toshiba-made flash memory chips, $10 for the DRAM chips manufactured by Elpida, and $32 for the cellular data network chips made by Qualcomm for the LTE-ready versions of the iPad Air. IHS analyst Andrew Rassweiler also points to the iPad Air's advances when it comes to supporting various LTE frequencies:With the iPad Air, Apple appears to have reached a new milestone on the wireless front: It can support every LTE

Retina iPad Mini Launch Supplies Set to Be 'Ridiculously Tight' Until Early 2014

Following concerns expressed during the lead-up to this week's Apple media event that the company would be unable to launch the Retina iPad mini in any significant volume before the end of the year, supply chain analysts continue to expect very low supplies of the device when it launches next month. Shortly after Apple announced the new Retina iPad mini, IHS iSuppli analyst Rhoda Alexander noted that supplies will indeed be "severely constrained", according to CNET."The supply for that product is severely constrained," said Rhoda Alexander, director of Tablet and Monitor Research at IHS iSuppli. "We don't expect to see meaningful volume until first quarter [of 2014]." Alexander expanded a bit more in comments shared by The Telegraph yesterday, calling the supplies "ridiculously tight" at one-third the levels seen for last year's launch of the original iPad mini.Rhoda Alexander, director of tablet research at IHS electronis and media, said: "The supply of the Retina Mini is going to be ridiculously tight in the fourth quarter. "Apple’s 2013 iPad shipment growth is shaping up to be comparatively modest and the shift in launch cycles has played a major role in the slowdown."Production of the Retina display panels for the new iPad mini is said to be the bottleneck for Apple, with Apple's suppliers needing to optimize processes for building displays with the same number of pixels as the full-size iPad but at the higher pixel density of the iPhone and iPod touch. Alexander is certainly not the only analyst to be predicting tight supplies of the new iPad mini, with

Uncertainty Remains Over Whether Retina iPad Mini Will Ship Alongside iPad 5 in 2013

According to market research firm IHS iSuppli (via CNET), production levels for the expected upcoming iPad mini with Retina display indicate that the device may not ship alongside the upcoming iPad 5, which looks to be "on schedule" for an October release. Specifically, it is estimated that Apple's Asia-based supply chain of manufacturers have begun the start of Retina iPad mini display production, but have not entered a mass production stage of the upcoming tablet. While Apple's iPad 5 looks to be on schedule for an October release, that's not the case for the Retina version of the Mini, according to Rhoda Alexander, director of Tablet and Monitor Research at IHS iSuppli. "The Retina Mini looks less certain for that time. Manufacturing volumes on that would match better with a Q114 [first quarter 2014] launch," she told CNET. Though she quickly qualified that saying, "But given that it's Apple, one never knows" -- meaning that Apple could announce a product but not necessarily ship it at the same time as the iPad 5.The research firm also cites design challenges, stating that a trade-off between the integration of the Retina display and the compact size and exceptional battery life of the iPad mini has become problematic. The claim does conflict with a report from IHS iSuppli last month stating that Retina iPad mini production levels were set to match last year's levels. KGI Securities analyst Ming-Chi Kuo also claimed earlier this month that the Retina iPad mini will indeed make an appearance before the end of the year. Apple is expected to launch its redesigned

iPhone Display Supplier Japan Display Begins Focusing Production Efforts on iPhone 5S

According to market research firm IHS iSuppli (via CNET), primary Apple supplier Japan Display Inc. is gearing up to focus its production efforts on Apple’s next-generation iPhone set to be released next month. The firm is currently a major supplier of displays for the iPhone 5, joining fellow Japanese company Sharp and South Korean electronics manufacturer LG in handling Apple's production needs. A report earlier this year stated that Apple had sent orders for LCD panels for the iPhone 5S to all three companies in June. "JDI is focusing on [production] volumes for the next iPhone launch. So capacity is consumed by smartphone production right now leaving little room for other [production] applications," Vinita Jakhanwal, director of mobile and emerging displays at IHS iSuppli, told CNET.The report also says that JDI is a candidate to provide Retina displays for an upcoming iPad mini, although it may not do so initially as it focuses on iPhone 5S production. Yesterday, IHS iSuppli reported that LG should be the main supplier for Retina iPad mini panels, with Sharp and perhaps Samsung also handling some of the production. Apple will reportedly unveil the next-generation iPhone on September 10, but it is still unclear whether the event will focus singularly on the iPhone 5S or also include the announcement of the rumored low-cost

Retina iPad Mini Display Production Levels Appear Set to Match Last Year's Model

According to market research firm IHS iSuppli (via CNET), production levels for displays destined for this year’s upcoming iPad mini are set to be on par with those of last year’s model. The firm also believes that this year’s iPad mini will feature a high-resolution Retina display, something that has been highly rumored for the upcoming device. "Based [what] we are seeing in the [production] pipeline...The volumes are similar to the iPad Mini that we saw in Q4 of last year," said Vinita Jakhanwal, director of mobile & emerging displays at IHS iSuppli, referring to display production. [...] LG Display is expected to be the main supplier initially for the Mini Retina, though Sharp is also expected to participate in production, Jakhanwal said. Other reports have also cited Samsung as a supplier as various manufacturers struggle to reach high-volume production of the pixel-dense yet thin display.Jakhanwal also notes that AU Optronics is currently supplying a small share of iPad mini displays but that it would need to "scale up" before it could begin supplying Retina display panels. Reports have indicated that Apple is likely to dump AU Optronics as an iPad mini display supplier as it moves to Retina panels. Earlier this week, a report from Bloomberg claimed that Apple will indeed release a thinner full-sized iPad and a Retina-equipped iPad mini within the last three months of 2013. This would mean that the upcoming September 10 media event for the iPhone would be completely separate from that of an iPad announcement. The new full-sized iPad is expected to have a nar

iPad Mini Component Costs Estimated to Begin at $188

AllThingsD reports on an iPad mini teardown from research firm IHS iSuppli estimating the component costs for Apple's new iPad mini at $188 for the 16 GB model.The base model, a Wi-Fi-only 16 gigabyte iPad mini, which sells for a starting retail price of $329, costs about $188 to build. Adding additional memory — the options are 32GB and 64GB — adds only incremental cost but a fair amount of profit, amounting to an additional $90 for the 32GB version and $162 per unit on the 64GB model.The report notes that approximately 43% of the device cost is related to the display, which adopts an expensive new process known as GF2 to reduce the part's thickness, although costs are expected to come down as the production process is refined. The bill of materials estimate provides support for Apple CEO Tim Cook's claim that the iPad mini has been priced aggressively with a profit margin significantly below the company's average. While the entry-level iPad mini is priced at $329 for a product that costs Apple $199 to build, the iPhone 5 costs Apple just $10 more to build but sells for $649. The iPad mini is, however, more in line with the full-size iPad, which IHS iSuppli estimated to carry a bill of materials of $306 for the entry-level third-generation model at its launch earlier this

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

Apple Predicted to Expand Lead in Global Semiconductor Purchases in 2012

Research firm IHS iSuppli today released the results of a new study tracking global semiconductor sales in 2012, predicting that Apple will expand its lead on the strength of 15% growth in the face of a stagnant market. Apple first topped the list in 2010 after quickly rising from third place in 2009 and sixth place in 2008.Apple is maintaining its lead in semiconductor purchasing because of continuing strong demand for its products, combined with the company’s capability to maintain beneficial relationships with more than 150 suppliers that provide components or offer manufacturing and assembly services. But aside from maintaining its global dominance in chip purchasing, Apple is also outgrowing the other OEMs and making gains in the various regions of the world. For Apple, this translates into competitive advantages when it comes to manufacturing electronic products. The report notes that Apple's increasingly dominant market position, which is estimated to see nearly double the revenue of second-place Samsung this year, gives Apple significant market advantages in terms of controlling pricing, availability, and product roadmaps. Apple is predicted to continue expanding its lead in 2013, with IHS iSuppli's estimates pegging Apple at 12.3% growth next year, the highest of any top-ten global

Samsung Sole Supplier for Retina Display in New iPad?

Bloomberg reports on comments from IHS iSuppli analyst Vinita Jakhanwal claiming that Samsung is currently serving as the sole supplier of the ultra-high resolution Retina display in the new iPad. Previous reports had indicated the Sharp and LG would also be supplying displays for the device.Samsung Electronics Co. (005930) will supply the touch screen for Apple Inc. (AAPL)’s new iPad after LG Display Co. (034220) and Sharp Corp. (6753) didn’t meet the U.S. company’s quality requirements, according to an analyst with iSuppli. Samsung, the world’s top flat-panel maker, currently is the sole vendor of the display for the 9.7-inch device, said Vinita Jakhanwal, a senior manager at iSuppli, a unit of Englewood, Colorado-based IHS Inc.Sharp's role in the new Retina iPad display has been particularly murky, with some sources claiming that the company was responsible for a new design intended for the display and that it would be a key manufacturing partner for Apple. Rumors of Sharp failing to meet Apple's quality control standards surfaced in January, although a photo of a leaked display from Sharp surfaced a few weeks later. Another report from last month similarly suggested that Sharp was not a part of Apple's supply chain for the new iPad display, despite having designed the component. Apple and Samsung have a complicated relationship given the fact that Samsung provides a substantial number of components for Apple's iOS devices even as it competes with Apple through its own Android-based hardware. Apple has reportedly been seeking to reduce its reliance on

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

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

Apple Reduces Build Cost of CDMA iPhone With Design Tweaks

Research firm IHS iSuppli today announced that it has completed its full teardown of the CDMA iPhone that launched on Verizon this week, estimating that the device carries a bill of materials cost of about $171.35, or approximately 9% less than the original iPhone 4. Despite having nearly the same functionality and a similar bill of materials (BOM) as the previous model, the new code division multiple access (CDMA) version of the iPhone 4 carried by Verizon Wireless includes significant changes in its design and component selection, IHS iSuppli teardown analysis indicates. The latest version of the iPhone 4 carries a BOM of $171.35, down from $187.51 for the previous model, based on a preliminary pricing estimate issued in June. When manufacturing expenses are added, the total production cost for the CDMA iPhone 4 amounts to $178.45.While some of the difference appears to simply be due to reductions in the cost of components over time and would similarly affect the GSM iPhone 4 if it were evaluated today, Apple has made a few design changes that may have reduced costs for the company. Most notably, with Apple's adoption of the MDM6600 "world-mode" baseband chip from Qualcomm offering integrated GPS circuitry, the company has been able to eliminate a Broadcom GPS chip that is present in the GSM version of the iPhone 4. The report also points to a revised version of the Wi-Fi combo chip module from Murata as an example of a design change adopted by Apple for the new device. The new module is smaller than the one used in the original iPhone 4 and represents further