iSuppli estimates the cost of each part and says this new Apple phone is slightly more expensive to build than past models.
Erica OggFormer Staff writer, CNET News
Erica Ogg is a CNET News reporter who covers Apple, HP, Dell, and other PC makers, as well as the consumer electronics industry. She's also one of the hosts of CNET News' Daily Podcast. In her non-work life, she's a history geek, a loyal Dodgers fan, and a mac-and-cheese connoisseur.
The parts used to construct the iPhone 4 cost about $187.51, according to a teardown analysis conducted by research firm iSuppli.
iSuppli dissected a 16GB iPhone 4, which went on sale Thursday, and estimated the cost of each component based on the manufacturer and volume. iSuppli's analysis is only an estimate because Apple is able to negotiate costs with each manufacturer. It also does not include how much Apple spent on shipping and labor to build the phone, or advertising, software development, and patent licensing.
"Over the years, the iPhone has generally tended to hover in the $170-$180 cost range because Apple seems to be trying to hit some kind of budget," iSuppli's Kevin Keller told BusinessWeek.
The higher costs for the iPhone 4 are because of two specific parts new to this year's model. The "retina display," which Steve Jobs called the most important component of the phone, is also the most expensive. iSuppli says each display, likely built by LG, costs $28.50.
The new gyroscope chip, thought to be supplied by STMicroelectronics, costs $2.60 each. The phone's Apple-designed A4 processor, which was built by Samsung, costs $10.75 each.
The retail price of the 16GB phone without a wireless contract is $599. AT&T subsidizes much of that cost to the consumer when he or she signs a two-year contract and the price drops to $199. AT&T is also thought to pay Apple for each phone as part of its exclusive agreement, though neither company has disclosed the amount.