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iPhone 4S parts cost $188, study finds

Apple's new smartphone is generating a profit with each unit sold, but the more storage a consumer wants, the more money Apple makes, a new study has found.

Don Reisinger
Former CNET contributor Don Reisinger is a technology columnist who has covered everything from HDTVs to computers to Flowbee Haircut Systems. Besides his work with CNET, Don's work has been featured in a variety of other publications including PC World and a host of Ziff-Davis publications.
Don Reisinger
2 min read

Apple's iPhone 4S is one expensive smartphone to produce, a new study from IHS iSuppli has revealed.

According to the research firm, which opened up Apple's latest smartphone to see what's inside, the 16GB version's bill of materials is $188. The 32GB version's parts jump to $207, according to iSuppli, while the 64GB option sets the company back $245.

iSuppli estimates that each unit costs Apple $8 to produce, therefore pushing the price of the devices up to $196 for the 16GB model, $215 for 32GB, and $254 for 64GB.

With a carrier contract and thus a subsidized price tag, the 16GB iPhone 4S is sold to consumers for $199, the 32GB model for $299, and the 64GB one for $399.

iSuppli's teardown reveals that the only difference between the three iPhone 4S models is the amount of NAND Flash memory. iSuppli assumes that Apple pays $19.20 for each 16GB of storage, so the devices' bill of materials were adjusted based on that figure.

Apple's iPhone 4S bill of materials, according to IHS iSuppli.
Apple's iPhone 4S bill of materials, according to IHS iSuppli.

Looking at the cost of Apple's components, iSuppli found that the device's "wireless section" costs the most, setting the company back $23.54 per iPhone produced. The iPhone 4S' Retina Display costs $23, while the touch screen goes for $14 per unit.

Apple launched the iPhone 4S last week. The device features the same design as its predecessor, the iPhone 4, but boasts a few improvements, including an 8-megapixel camera and a dual-core processor. The device is also a world phone, allowing users to have wireless access in 200 countries around the globe.

So far, the iPhone 4S has proven extremely popular. Apple announced on Monday that in its first weekend of availability, 4 million units of the iPhone 4S were sold worldwide, easily eclipsing the previous record set last year by the iPhone 4 of 1.7 million units sold in its first weekend.

Best of all for Apple, as its sales grow, the company's costs aren't rising all that much. In fact, last year, iSuppli found that iPhone 4 production costs started at $187.51. In 2009 when Apple launched the iPhone 3GS, that device cost $178.96 for the company to produce.

Keeping costs low and selling more devices has helped Apple continue to post huge profits. Earlier this week, the company said that it generated a profit of $6.62 billion on $28.27 billion in revenue during its fiscal fourth quarter ended September 24. During the three-month period, it sold 17 million iPhone units.

Apple did not immediately respond to CNET's request for comment on how much it costs the company to produce a single iPhone 4S unit.