An IHS report estimates Apple's iPhone 5 costs the company $199 to $230 to build, depending on the model.
Apple's iPhone 5 packs some of the latest
features, high quality materials and advanced components in the smartphone
market into its slim frame, bringing the bill of materials (BOM) for the low-end
version, the 16GB model, to $199, according to a virtual teardown of the
handset by the IHS iSuppli Teardown Analysis Service. The addition of 4G Long-Term
Evolution (LTE) capability, a new processor and a larger screen contributed to
the higher production cost, the report concluded.
An $8 manufacturing cost pushes the total
price to $207, while the BOM for the 32GB version is $209 and for the 64GB
version is $230, according to the report, which is based on an analysis of the
specifications announced by Apple, combined with information regarding known
components and suppliers. Apple's touch-sensitive display is the costliest
component of the handset, costing Apple $44, a bump up from the $37 cost for
the iPhone 4S. The report said the added cost was due to the larger 4-inch
screen on the iPhone 5, as well as the inclusion of the new in-cell touch-screen
"The iPhone 5's components are expected
to be slightly more expensive compared to the iPhone 4S model," Andrew
Rassweiler, senior principal analyst of teardown services for IHS said in a
prepared statement. "The low-end iPhone 4S with the same memory density as
the base-model iPhone 5 carried a BOM of $188, according to a preliminary
estimate issued by IHS in October 2011. 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."
Another major upgrade of the iPhone 5 is the
use of Apple's A6 processor, which has a dual-core processor as well as several
graphics processing units to boost performance and replaces the A5 processor
found in the iPhone 4S. The report estimated the A6 to be slightly more
expensive, at $17.50, compared to $15 for the A5, based on pricing at the time
of the iPhone 4S introduction. The addition of high-speed 4G LTE technology,
one of the most anticipated features on the iPhone 5, is estimated to have
driven up the cost of the wireless section to $34, compared to about $24 for
the iPhone 4S.
"The iPhone 5 makes a big evolutionary
step in technology that we have not seen elsewhere with the use of in-cell
touch sensing," Rassweiler continued. "Most other smartphone LCDs use
a completely distinct capacitive touch-screen assembly that is physically
separate and placed on top of the display. The iPhone 5 partially integrates
the touch layers into the display glass, making the product thinner and
reducing the number of parts required to build a display that senses touch
without the need for a separate capacitive touch layer."
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.