Report pegs iPhone 4S manufacturing cost at $203

By on October 6, 2011, 1:00 PM

Apple is reportedly paying around $203 for each 32GB iPhone 4S that rolls off the assembly line, a phone that retails for $749 before carrier subsidy. At this price, Apple will achieve the same profit margin that they have experienced in previous iPhone launches, says Canadian research firm UBM TechInsights.

UBM came to this conclusion by analyzing the iPhone 4S announcement and factoring in the current market prices for each known component. For example, the A5 processor is valued at $26 and the retina display is $31.

Of interest in the estimated cost analysis is the mention of only 512MB of RAM. Apple typically doesn't reveal RAM capacity and many have speculated that the 4S would include 1GB, up from the 512MB that was found in the iPhone 4.

“Technology-wise, you aren’t seeing anything revolutionary or unexpected from the iPhone 4S”, says Jeffrey Brown, Vice-President of Business Intelligence. “As we predicted in July, the iPhone 4S is a moderate improvement over the iPhone 4 – featuring an A5 processor that has been in use for approximately nine months, an image sensor that puts the handset on par with its competitors, and improved battery life.”

Apple announced the evolutionary iPhone 4S just one day before co-founder and tech visionary Steve Jobs passed away. The 4S features a dual-core A5 processor, a faster wireless network and an 8MP camera with much-improved optics.

The iPhone 4S will be available in 16GB, 32GB and 64GB capacities for $199, $299 and $399 respectively in white and black. Pre-orders start October 7 and availability in the US, Canada, Australia, the UK, France and Germany will be on October 14. The phone will be available on AT&T, Verizon Wireless and Sprint in the US. An additional 22 countries will get the 4S on October 28, with 70 countries having availability by the end of the year.

User Comments: 10

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Recipe7 Recipe7 said:

Here come the iphone and android fanboys -_-

Guest said:

Since the "manufacturing" price is 203, and the carrier price is about 100 bucks higher, would it be the carriers that set the non contract price? Set it so high which would pretty much force most to buy it on contract?

gwailo247, TechSpot Chancellor, said:

Making profit is good and all, but you have to admire Apple's ability to make people actually proud to pay that money.

bexwhitt said:

think I will stick with my X2

Guest said:


At first I thought it was stupid to buy the iPhone and then I realized:

1) While older Android phones go for $29.99-129.99, you are pretty much stuck with that version of OS, unless you want to illegally install newer OS. For example, my Samsung Galaxy S is stuck on 2.1 forever, regardless if 2.3 or 3.0 come out later.

2) You can resell your current iPhone on Ebay or Amazon or other sites. In fact, you can sell to a number of sites directly your used iPhone in 12-24 months. I checked, and no one wants my Samsung Galaxy S. So if you consider $200-300 I can get back reselling the iPhone, then it actually makes it cheaper than owning an Android phone.

3) If you care about costs, then you aren't going to be on a contract in US anyway. You'll get an unlocked Nokia or go pre-paid etc. I just moved from Canada to US and my cell phone bill will be almost 2x higher for less features. The problem with smartphones in US is not the cost of the phone, but the ridiculous cost of monthly plans (such as $39.99 for bare features and another $15 for data plan).

4) I am of the view that a person should spend $$ on things they interact with or use often (i.e., esp. daily). For example, I have a 37 inch LCD for my PC because I use it every day. So I'll spend $1000+ on a nice LCD over a 22 inch PC Monitor. In the same fashion, many people use smartphones every day. So is $199 + $60 a month to pay a lot for the convenience factor? Maybe for a student or someone earning minimum wage. For a middle to upper-class income earner, $60 a month is nothing.

aj_the_kidd said:

@Guest FYI

1)Installing a new OS is not illegal it just may void your warranty and/or prevent you from getting support. Also most telecoms have a 2.3 update out for Galaxy S.

2)Never resold an old phone so its not an issue for me, just gave them to one of my sisters, but yes iPhone has that avantage

3 & 4)I find somehow people without money somehow own iPhones, go figure. Pre-paid is too much of a hastle for me, plus $60/month is reasonable to me

Guest said:

"my Samsung Galaxy S is stuck on 2.1 forever, regardless if 2.3 or 3.0 come out later."

I have 2.3.3 on my galaxy S that I got from my Service provider, and I am sure if enough people ask they will make 3.0 avaialble

Also, why would you pay $50-100 more for a phone that has less(no SD Card slot, does not support flash ect) or the same features of an android phone that is more than 8months old, sure the iPhone looks nice and has a pretty screen...

BMfan BMfan said:

Apple,sticking it too their cult members as always.

Jibberish18 said:

I'm going to go ahead and guess that one way of keeping costs down is to use the same 3.5" screen for, ooooh 5 years now? Maybe I'm wrong. Either that or Steve Jobs spirit lives on by reminding the tech world of how ridiculous he thinks bigger size screens really are.

BTW one of the things I was looking forward to was a larger screen. 4" would have been fantastic.

Guest said:

3.0 is tablet only ... maybe you mean 2.3.4, 2.3.5, 2.3.6, 2.3.7, or 4.0

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