Apple iPhone 3G S Costs $178.96 to Make, iSuppli Reports

While the Apple iPhone 3G S smartphone is more feature-rich and powerful than the iPhone 3G, its bill of materials is only a few dollars higher, iSuppli reported after a teardown of the device.
 
"The entry-level, 16GB [iPhone 3G S] carries a BOM cost of $172.46 and a manufacturing expense of $6.50, for a total of $178.96," iSuppli analyst Andrew Rassweiler said in a statement. "This is slightly higher than iSuppli's estimate of $174.33 for the original low-end 8GB version of the original iPhone 3G based on pricing in July 2008."
 
Rassweiler added that while consumers pay $199 for the phone, the cost paid by its mobile operator, AT&T, is much higher—but well worth it, considering the ongoing profit it receives from subscribers.

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The iPhone 3G S offers video capture, an auto-focus 3-megapixel camera and a digital compass, but aside from these features, iSuppli found the hardware on the 3G S to vary very little from that of the 3G.

"From a component and design perspective, there's a great deal of similarity between the 3G and 3G S," Rassweiler said in the statement. "By leveraging this commonality to optimize the materials costs, and taking advantage of price erosion in the electronic component marketplace, Apple can provide a higher-performing product with more memory and features at only a slightly higher materials and manufacturing cost."
 
However, iSuppli did find a few key differences between the two iPhones.
 
While the iPhone 3G used a Marvell Technology Group WLAN chip and a Cambridge Silicon Radio Bluetooth Integrated Circuit, the 3G S offers all the same functionality with a single chip, a Broadcom Bluetooth/FM/WLAN, which costs Apple $5.95.
 
The 3G S also replaces its predecessor's NXP Semiconductors technology with a Dialog Semiconductor power management IC, for $1.30. The digital compass comes courtesy of an AKM Semiconductor electronic compass and STMicroelectronics accelerometer, though iSuppli did not offer prices for either.
 
The priciest bits of the iPhone 3G S, according to iSuppli's findings, were all from Toshiba—the 16GB Multilevel-Cell NAND flash, for $24; the 3.5-inch display module, for $19.25; and the touch-screen assembly, for $16.
 
According to iSuppli, there's a high likelihood that the NAND and display module could be sourced from other manufacturers as well. In the case of the NAND, iSuppli suggested Samsung as a likely additional supplier.
 
The Infineon Technologies GPS receiver comes to the iPhone 3G S for just $2.25, and Cirrus Logic stereo parts with a headphone amplifier cost Apple just $1.15 per device.
 
In April, iSuppli also performed a teardown of the Palm Pre, which it estimated costs $170 to build.