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Apple iPhone 3GS: The sum ($) of its parts

iPhone 3GS carries $178.96 bill of materials and manufacturing cost, iSuppli teardown reveals.

The iPhone, of course, is more than the sum of its parts, but the cost of individual components adds up--to $178.96, to be exact.

A new analysis by iSuppli details the cost of the iPhone 3GS and the motley collection of chips inside.

The entry-level (16GB) version of the iPhone 3GS carries a BOM (bill of materials) cost of $172.46 and a manufacturing expense of $6.50, for a total of $178.96, said Andrew Rassweiler, director and principal analyst, teardown services, for iSuppli, in a statement.

Apple iPhone 3GS major components and cost drivers
Apple iPhone 3GS major components and cost drivers iSuppli

Service providers are paying more for the low-end iPhone 3G S than the original iPhone 3G, according to Rassweiler. "Although the retail price of the 16GB iPhone 3GS is $199, the same as for the 8GB version of the original iPhone 3G, the actual price of the phone paid by the service provider is considerably higher, reflecting the common wireless industry practice of subsidizing the upfront cost of a mobile phone and then making a profit on subscriptions," he said.

And what are the major cost drivers? The 16GB flash memory chip is the priciest at $24--and reflects the rising cost of flash chips due to supply constraints, according to iSuppli. This part is also available from Samsung. So there could be some second-sourcing (sourcing the part from a second chip supplier) in the future.

The next rung in the cost ladder is the 3.5-inch display module and touch-screen assembly, at $19.95 and $16, respectively.

Below this, is the main Samsung applications processor. Priced at $14.46, it is the fourth most costly component in the iPhone 3GS. As reported earlier, the new ARM-based Samsung processor (Apple branded, by the way) plays a key role in the 3G S' improved performance. In the 3GS, the processor runs at 600MHz version, in the 3G at only 400MHz.

Beyond faster performance, the iPhone 3GS adds video capture, an autofocus 3-megapixel camera--compared with 2 megapixels before--and a built-in digital compass.

Aside from these extras (and the new processor), the 3GS hardware feature set (that user sees) is not much different from that of the 3G, iSuppli said.

"From a component and design perspective, there's also a great deal of similarity between the 3G and the 3GS. By leveraging this commonality to optimize materials costs, and taking advantage of price erosion in the electronic component marketplace, Apple can provide a higher-performing product with more memory and features at only a slightly higher materials and manufacturing cost," Rassweiler said.

And how did other chip suppliers do beyond Toshiba and Samsung? Broadcom is supplying a single-chip Bluetooth/FM/WLAN device, costing $5.95. Look closely, and squeezed in between the Bluetooth and WLAN (wireless local area network) is an FM radio feature. The iPhone 3GS does not list an FM radio as one its features, but that's part of the feature set of the Broadcom chip. In this case, it may be simply disabled.

AKM provides an electronic compass and STMicroelectronics, the accelerometer, both of which are 3-axis devices. The STMicroelectronics part allows the 3G S to determine device orientation or inclination, while the AKM sensor detects device movement relative to magnetic north, supporting the 3GS' capability to reorient a map displayed on the screen to correspond with the direction the user is facing, according to iSuppli.

Infineon Technologies AG is the supplier of the phone's important baseband chip, which accounts for $13 of the 3GS component costs.