iPhone 4S teardown reveals 16GB unit carries $188 BOM

[Shawn Knight]

Apple’s 16GB iPhone 4S carries a build of materials (BOM) of $188 before factoring in manufacturing costs. The analysis was performed by iSuppli, one of several teardown specialists that conduct such work in order to estimate build costs and identify hardware vendors that supply parts for various consumer electronics.

Aside from memory capacity, the two other iPhone 4S models are identical internally. The 32GB handset has a BOM of $207 while the 64GB phone has a value of $245. As you can likely surmise from the overall costs, NAND flash is one of the most expensive components inside an iPhone.

16GB NAND costs $19.20 in contrast to a 64GB setup which is $76.80. The electrical system is the next most expensive subsystem at $33, followed by wireless capabilities at $23.54 and the display at $23.

Surprisingly enough, items that most would expect to be very expensive are relatively cheap. The A5 processor and camera subsystem, for example, are only $15 and $17.60, respectively. Sensors and user interface components only total $6.58 per phone.

iSuppli points out that their analysis is preliminary in nature and only accounts for hardware costs. Other expenses like software, licensing and royalties are not included. Manufacturing costs are listed at $8 per handset, regardless of capacity.

Carriers offer the iPhone 4S at subsidized prices of $199 for the 16GB model, $299 for the 32GB unit and $399 for the 64GB smartphone with a two year service agreement. Apple sells each phone to carriers for much more than this but service providers eventually make back their money and then some over the course of the contract.

Photos courtesy iFixit.

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https://www.techspot.com/news/45942-iphone-4s-teardown-reveals-16gb-unit-carries-188-bom.html

 

[Guest]

I noticed that on the second paragraph that the words memory was mixed with storage. 32Gb of memory, although it makes my mouth water, does seem a bit much for a smart phone.

 

[MilwaukeeMike]

it's a bummer the smartphone market doesn't work like the video game console market did back in 2005/2006. Back when Sony and Microsoft wanted to get the PS3 and Xbox into our homes they sold them for under the cost in order to get in the market with the plan that they'd make the money back on games.

Knowing that a $200 iphone sells retail without a contract for what? $400? That's a huge markup. I know the carrier needs their cut, but you'd think for the promise of around $2000 over the next two years they'd drop the price of the phone another $50 - $100 or so to undercut the competition.

No reason too though with people lining up to buy em....

 

[brianmsu]

Guest said:
I noticed that on the second paragraph that the words memory was mixed with storage. 32Gb of memory, although it makes my mouth water, does seem a bit much for a smart phone.

storage = non-volatile memory = memory

Besides, Apple, Samsung, etc are going to market it all under one category anyway, so what difference does it make.

Weakest grammar / typo correction ever.

 

[slh28]

I think the markup on the 16GB verison isn't too bad, you have to factor in development, marketing and software costs. But charging $200 for extra flash memory which actually costs $57 more is pretty criminal. No wonder Apple doesn't allow micro SD cards in their phones.

 

[princeton]

milwaukeemike said:
it's a bummer the smartphone market doesn't work like the video game console market did back in 2005/2006. Back when Sony and Microsoft wanted to get the PS3 and Xbox into our homes they sold them for under the cost in order to get in the market with the plan that they'd make the money back on games.

Knowing that a $200 iphone sells retail without a contract for what? $400? That's a huge markup. I know the carrier needs their cut, but you'd think for the promise of around $2000 over the next two years they'd drop the price of the phone another $50 - $100 or so to undercut the competition.

No reason too though with people lining up to buy em....

$400 for the non contract? Try $649. Yah, it's that bad.

 

[spydercanopus]

Cheapest slave, ever.

 

[Zecias]

Princeton said:

milwaukeemike said:
it's a bummer the smartphone market doesn't work like the video game console market did back in 2005/2006. Back when Sony and Microsoft wanted to get the PS3 and Xbox into our homes they sold them for under the cost in order to get in the market with the plan that they'd make the money back on games.

Knowing that a $200 iphone sells retail without a contract for what? $400? That's a huge markup. I know the carrier needs their cut, but you'd think for the promise of around $2000 over the next two years they'd drop the price of the phone another $50 - $100 or so to undercut the competition.

No reason too though with people lining up to buy em....

$400 for the non contract? Try $649. Yah, it's that bad.

and $849 for the 64GB model, almost how much it cost for my desktop >.>

 

[princeton]

zecias said:

Princeton said:

milwaukeemike said:
it's a bummer the smartphone market doesn't work like the video game console market did back in 2005/2006. Back when Sony and Microsoft wanted to get the PS3 and Xbox into our homes they sold them for under the cost in order to get in the market with the plan that they'd make the money back on games.

Knowing that a $200 iphone sells retail without a contract for what? $400? That's a huge markup. I know the carrier needs their cut, but you'd think for the promise of around $2000 over the next two years they'd drop the price of the phone another $50 - $100 or so to undercut the competition.

No reason too though with people lining up to buy em....

$400 for the non contract? Try $649. Yah, it's that bad.

and $849 for the 64GB model, almost how much it cost for my desktop >.>

You know what's the most hilarious thing? Back before the 4S the 32GB iPhone 4 was $769, the 32GB iPod Touch 4th Gen was $299. The only difference was the glass back on the iPhone and the iPhone having a radio built in for gps/cellular. So Apple basically charged $470 for the inclusion of a radio and a more fragile design. WHAT A GREAT DEAL!

 

[aj_the_kidd]

To play Apples advocate, like slh28 said, you do have to take into account software development, which i would imagine be quite allot, that being said the markup price is rather huge, but since its Apple, its not really a surprise

 

[Guest]

Nobody force you to buy it. Besides everybody is doing similarly.

There are hidden cost as well. Apple's PFO is merely 20%~30%. Try Wall street's 200%.

 

[Rick]

aj_the_kidd said:
To play Apples advocate, like slh28 said, you do have to take into account software development, which i would imagine be quite allot, that being said the markup price is rather huge, but since its Apple, its not really a surprise

Yeah, not to mention all of the costs of actually having the product produced & shipped, R&D, advertising, technical support, signage and training for roll-outs to the Apple stores and carriers, future warranty repair and replacement... There are literally hundreds of thousands of costs that JUST build materials doesn't cover. Their profit isn't anywhere close to what is suggested by these teardowns.

The price of the iPhone is not far out of alignment with the price of other phones (eg. Samsung Galaxy S II, Droid Bionic etc..), either subsidized or non-contract, especially if you take care to match up the competition with the same capacity (8-16GB).

 

[Guest]

I believe that is "Bill of Materials" not Build of Materials. BOM