Verizon Wireless Apple iPhone 4 Components Cost $171.35: IHS iSuppli

Design changes to the Verizon iPhone 4 lower its bill of materials to $171.35, says IHS iSuppli, which estimated AT&T's iPhone 4 BOM at $187.51.

The Verizon Wireless iPhone 4 carries a bill of materials totaling $171.35, making it a few bucks cheaper than AT&T's GSM-based model, IHS iSuppli reported Feb. 9. The AT&T phone, by the firm's estimate, carried a BOM of $187.51.

The costliest items on the BOM are the phone's memory, which is supplied by Samsung and Toshiba and priced at $40.40, and its display and touch-screen, just shy of $38-two of the items that are actually mostly unchanged.

That the smartphones' tallies varied didn't come as a surprise to the research firm, which in a Feb. 9 teardown of the CDMA-based (Code Division Multiple Access-based) Verizon phone discovered that Apple had put a good deal of work into its newest phone, despite its nearly identical likeness to its AT&T sibling.

"With the CDMA iPhone 4, Apple has shown once again that it never recycles a product design," Andrew Rassweiler, senior director of teardown services for IHS iSuppli, said in a statement. "Apple's new designs always exhibit changes, evolution and optimization."

These three factors were evident in the Verizon iPhone 4's antenna design, as well in its integrated GPS functionality and WiFi/Bluetooth module, said Rassweiler.

That module, according to IHS iSuppli Senior Analyst Wayne Lam, was one of the most significant changes in the redesign. While the AT&T iPhone features an all-in-one approach, with the GPS, Bluetooth and WLAN on one segment of the antenna superstructure, the Verizon model features a separate antenna for its Bluetooth and WLAN connectivity.

"This design change leaves the top enclosure antenna segment to serve primarily as the GPS antenna and probably also as a CDMA diversity receive antenna," said Lam. "The use of antenna diversity is significant because this scheme improves signal-reception performance."

Its improved performance, however, still wasn't enough to prevent new reports of the smartphone suffering from a "death grip" glitch that causes a loss of reception, failed calls and dropped connections.

The new iPhone 4 also replaces the original's Infineon baseband chip with a Qualcomm MDM6600 baseband/RF transceiver, which, paired with CDMA technology from Skyworks (and likely also TriQuint, says the firm), was priced at $16.41.

Rassweiler explained that, "By using the Qualcomm baseband chip that integrates GPS, Apple can go without the discrete Broadcom GPS device" that supported the original iPhone's GPS control circuitry.

The smartphone's camera, at $13.70, follows the Qualcomm chip and precedes its Murata Bluetooth/WLAN module.

"The Murata WiFi combo module features the same core functional chip from Broadcom but has shrunk in size," Rassweiler notes, praising Apple's decision. "Murata has years of experience with low temperature co-fired ceramic substrates into which passive components can be embedded, helping to keep overall module size small, and now even smaller."

Next up, at $8.18, is the phone's Samsung A4 processor, followed by user-interface components-the gyroscope, audio components, touch-screen controller, compass and accelerometer-at $8.18.

After these come power-management components ($6.50), the battery ($6.00) and the contents of the phone's box ($5.66)-none of it small potatoes, really.

IHS iSuppli adds that manufacturing costs tack on $7.10 to the total-and that it's noteworthy that expenses such as software, licensing, royalties and other "soft expenses" aren't included in its grand total.

It's been reported that AT&T pays Apple $600 per phone, which, under heavy subsidy, AT&T passes on to its subscribers for $199. Whether Verizon pays the same price is unknown.