iPhone 5 Costs $199 in Parts; Sells for $649 Off-contract

By Wolfgang Gruener
published

Apple is spending more money to build the iPhone 5.

According to a preliminary teardown analysis provided by IHS, the estimated hardware cost of the 16 GB version of the iPhone 5 is $199, which is up from an estimated $188 for the iPhone 4S in October 2011. If $8 of assembly cost is included, the 16 GB iPhone 5 may cost Apple about $207, the 32 GB version $217 and the 64 GB model $238.

The cost not included in this calculation are secondary items such as R&D, shipping as well as PR and marketing. However, given the fact that Apple has non-contract prices of $649, $749 and $849 for its iPhones, there is still a very comfortable profit margin this device.

IHS said that the increased cost for Apple is due to more expensive display and wireless components, while the price for NAND Flash has fallen considerably. In the base model, the most expensive part is the display with a cost of $44 and the wireless section with a cost of about $34. The 16 GB flash chip is among the cheaper parts with just $10.40 cost.

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Wolfgang Gruener
85 Comments Comment from the forums
  • TOTALLY WORTH IT!

    (can I thumbs down my own post?)
    Reply
  • lahawzel
    Only in mobile devices does $30 of extra NAND sell for a $200 premium.
    Reply
  • Johmama
    Since this is Tom's, I expect a thousand anti-Apple comments here, but I'd like to try to get a mature and neutral analysis on this article.

    Apple company/logo aside, if any company was doing this stuff, I would be very upset with them. I can understand having to recoup marketing and research and stuff, but a 300+% markup!? There is no way they aren't just upping the price for pure profits, and the sad part is: they'll still sell an insane amount of them. Corporate greed like this sickens me.

    So according to my neutral analysis of this article: Apple is a greedy company that sells underpowered devices for ridiculous prices. It's always nice to take a step back, check to see if your convictions hold any ground, and be re-assured.
    Reply
  • Tab54o
    They buy this stuff in HUGE quantities surely the volume pricing is MUCH lower than this.
    Reply
  • DrinkTray
    A 326% mark up for Crapple? Those are some loyal customers. At least the Foxconn employees are well provided for...
    Reply
  • chomlee
    I like how they are charging a $100 and $200 premium for the upgraded memory when the costs have dropped considerably. Apple is only doing this because "They Can"...... Greed Bastards. I guess that is why there stock is breaking $700.
    Reply
  • cozalp
    JohmamaApple is a greedy company that sells underpowered devices for ridiculous prices.
    Who is to blame for this? Buying customer or the company? Being greedy is in the nature of any company. They take money from anyone who is willingly give it. People should be more aware of the choices and what suits them best.
    Reply
  • chomlee
    There is already reports of Iphone5s selling for $1100 on ebay. Obviously some rich person that "has to have it NOW".
    Reply
  • victorious 3930k
    Look at the markup. You already know it's apple.
    Reply
  • wannabepro
    jrm59TOTALLY WORTH IT! (can I thumbs down my own post?)I'll do it for you!
    Reply