iPhone 5 may cost Apple $167.50 to build, says one estimate

The new phone's bill of materials is a bit pricier than its two predecessors, according to an estimate from TechInsights.

The iPhone 5 front and back.
The iPhone 5 front and back. Apple

Apple could be shelling out $167.50 to make each 16GB iPhone 5.

At least that's according to an initial estimate calculated by research firm UBM TechInsights. Looking at the entry-level iPhone 5, the firm broke down the potential cost of each of the various components.

The new 4-inch 1136x640 pixel display costs $18 to build, the touch screen $7.50, and the battery $3. The A6 processor goes for $28, while the camera costs $10 and the built-in WiFi/Bluetooth/GPS is only $4. Add in the cost of several other components, and you end up with a BOM (bill of materials) of $167.50.

In comparison, the 16GB iPhone 4S costs Apple $132.50 to build, according to TechInsights' estimates, while the 16GB iPhone 4 has a price tag of only $112. Except for the battery and the NAND flash storage, every component costs more for the iPhone 5 than for the previous two models.

The BOM for the iPhone 5 is based on very preliminary estimates since the device has yet to be taken apart and analyzed internally.

TechInsights promises that it will open up the new iPhone and check out its insides once the device is available on September 21. That teardown should yield a more accurate estimate.

The 16GB iPhone 5 sells for $199 with the standard two-year contract. The 32GB model costs $299, while the 64GB version is going for $399. Of course, those are the subsidized prices. The carriers pay the bulk of the costs, so Apple still makes a healthy profit on each one. For example, a non-subsidized 16GB iPhone 5 would sell for $649.

The iPhone 5 is now available for preorder. But some eager customers ran into delays and other issues today trying to order the phone online from third-party retailers. And those who didn't grab one quickly enough now face an estimated ship time of two weeks, according to Apple's Web site.

Updated 9/17 5:30 a.m. PT to clarify that $199 is the subsidized price for the 16GB iPhone 5.

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About the author

Journalist, software trainer, and Web developer Lance Whitney writes columns and reviews for CNET, Computer Shopper, Microsoft TechNet, and other technology sites. His first book, "Windows 8 Five Minutes at a Time," was published by Wiley & Sons in November 2012.

 

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