New teardown reveals 16GB iPhone 5 parts worth $200

By , Sep 19, 2012

Last week we saw a preliminary teardown of the 16GB iPhone 5 peg its bill of materials (BOM) at $168. This number is essentially the sum of the costs of all of the handset’s parts.

Today, however, a second teardown has been released, claiming that the BOM for Apple’s new entry-level handset is a bit more than that. It says that number is closer to $200…

9to5Mac points to a new report from iSuppli, a marketing research firm with an expertise in supply chains. As you can see in the above chart, it has broken down all of the parts that make up the iPhone 5, and what they cost.

“With the base model carrying a $199.00 BOM, the iPhone 5’s components are expected to be slightly more expensive compared to the iPhone 4S model,” said Andrew Rassweiler, senior principal analyst, teardown services, for IHS. “The low-end iPhone 4S with the same memory density as the base-model iPhone 5 carried a BOM of $188.00, according to a preliminary estimate issued by IHS in October 2011.”

Like TechInsights mentioned during its teardown last week, iSuppli points out that the rise in costs can be attributed to new components like the 4-inch in-cell touch display, and the Qualcomm LTE chip. iSuppli and TechInsights disagree on the cost a little bit, but either way, it’s gone up since last year.

The reason people like to take a look at these numbers is to try and determine what Apple could make per handset. Obviously, there’s hundreds of unknown variables here, but the BOM still works as a jump off point.

Apple’s profit margins are the stuff of legends, especially in the smartphone industry. Typically, Apple accounts for more than 70% of all mobile phone profits thanks to its supply chain prowess and influence.

And it looks like this will continue on with the iPhone 5. Even if you factor in costs for things like manufacturing, which iSuppli says adds about $8, shipping and marketing, Apple still stands to make some a lot of money.

  • Share:
  • Follow:
  • http://www.facebook.com/people/Marlon-Greg-Ceballe/1261923209 Marlon Greg Ceballe

    i hope i can get that iPhone 5 on that price.. 1st?!

  • bill bill boo

    Don’t forget it’s not one person buying parts and making them. They have a MASSIVE team.

  • Kurt

    and fanboys love being ripped off. i dont get it. not even this can they say one word against their god “apple”

  • http://www.youtube.com/Tr1pTr0p Tr1pTr0p

    THIS is why Apple is so filthy rich. Premium high quality ripoff. :/

    • Kok Hean

      Should have been $499 max for the 16 GB version.

      • Blake

        Not a chance! Most companies mark the cost of a product up an average of at least 400%. Apple is not the only one that does this. That is the consumer world, everything is that way. You need to do your research before you start making absurd speculations. Here is a great example of price mark ups. The average family size car costs about $1,255 to manufacture, and if you are talking a luxury car, about $2745. Do you see those cars being sold for that much? No, they are marked up when the company sells them to the dealership, and then they mark them up to make profit. So we will just say $20,000 for the car. There is no cost that could make the car cost that much, whether it is shipping, paying employees etc. It doesn’t matter. This is the consumer world and all companies do the same exact thing.

      • miel

        Can’t we get some good old fashioned child labor to make these things?

  • Jerry

    If you were to buy each part at full retail price not bulk price I’m sure the numbers would be a lot higher.

    • Falk M.

      You cannot buy all of them, some stuff is not to be sold to anyone else but Apple.
      For example the A6 chip. :)

  • Liu Zhenyu

    Parts worth 200 bucks, labour and electricity, 50 bucks considering that pieces are complicated and plenty. Taxes up to 10% can be imposed in some countries and not forgetting research, shipment, design and apple employee wages. In the end, you pay $199 with a contract and chepos whine like little kids.

    • iFone 4S

      You are retarded

    • Kurt

      labor is 7 bucks, not 50. its a rip off.

      • Liu Zhenyu

        Even so, how is paying 199 bucks for the phone with contract a ripoff for 200 buck parts?

      • Kurt

        you do realize someone pays for it…ie. cell companies who give their customers worse service for a phone that is over priced. at least in this country there is no such thing as throttling and other limits they have in many other countries.

      • Liu Zhenyu

        Answer my question

      • Kurt

        i did tough guy

      • http://www.facebook.com/MoShehab Mohammed Shehab

        yeah.. you’re saying the rip-off comes from the cell companies not apple!?

    • http://www.facebook.com/luisreyespr Luis

      i wonder is people actually expect a product to ship at its parts price. This post is not meant to imply that the product should be cheaper. Just cause the parts exist, doesn’t mean they got miraculously sent by god for us to be used, add the cost of what @liuzhenyu:disqus said, +design, + engineering +software expenses, +manufacturing it. +transportation + retail expenses/salaries.
      That being said: they should f**g lower the price of higher capacity memory, i mean lets charge me over 100$ cause the memory is 10$ more?

      • Kurt

        the price of memory is ridiculous

  • http://djterm.de/ Robo Term

    what about cost for software development????????
    ios doesnt fall from the trees….

    • Kurt

      well its basically the same each year so that’s mostly been paid for in 2007

      • http://djterm.de/ Robo Term

        LOL

    • http://www.youtube.com/Tr1pTr0p Tr1pTr0p

      Creating the physical device (hardware) costs $200, but Apple stamped it with a $649+ price tag. Yes, they have to make profit, but I sincerely doubt shipping, research and development cost $400 per device.

      • http://djterm.de/ Robo Term

        so what does shipping, research and development cost per device???

      • http://www.youtube.com/Tr1pTr0p Tr1pTr0p

        Fine, I’ll even do the math for you. If they had like 10,000 people working on the iPhone 5 (which I’d say is a massive overestimate by me) for the past 12 months, and all of them had an average salary of around $7,000 a month (www glassdoor com/Salary/Apple-Salaries-E1138.htm). That’s $840 million in total for salaries only. I’ll even add a $1 billion for other expenses, just for the sake of it. If they plan on selling 25+ million units this quarter alone (venturebeat com/2012/09/18/apple-price-target-hits-840-on-iphone-5-reality-and-ipad-mini-rumor/), that would add up to $73.60 per unit. Definitely not $400.
        Keep in mind how they may sell up to 60 million or maybe even more units by the time “iPhone 6″ arrives. In that case, R&D cost could be as low as $30 per unit.

      • http://djterm.de/ Robo Term

        software developer sallary goes from 70k$ up to 200k$ / year and senior software developer sallary goes from 95k$ up to 228k$ / year

        so where does the 7,000$ in your equation come from?

        i think you have no idea what you are writing about and you’re doing it just because of apple bashing is a kind of fashioned.

      • http://www.youtube.com/Tr1pTr0p Tr1pTr0p

        I said “average salary of around $7000 a month”, but FINE! Even though not everyone out of those supposed 10,000 people who worked on the iPhone 5 have salaries as high as you mentioned, I’ll give you the benefit of the doubt.
        So, 10,000 people, $16,000 monthly salary ($190k per year) for each, that would be $2 billion for salaries only in 12 months. Add that other billion for other expenses, we end up with $3 billion. By the time “iPhone 6″ arrives, they could sell up to 60 million units. Do the math! $3 billion, divided by 60 million units is how much? $50 a unit!

      • http://djterm.de/ Robo Term

        you mingle estimated data with facts.

      • http://www.youtube.com/Tr1pTr0p Tr1pTr0p

        If estimated data is greater than what things actually are and could ever possibly be, then those estimates can give you a good idea.
        So let me do it again. Let’s imagine the iPhone is Apple’s only product, and all of the 47,000 Apple employees (even the geniuses in Apple stores) worked on it’s development. Also, each and every one of those employees had a yearly salary of $100,000. Even then, after selling 60 million units, would cost of development be only around $80 per unit.

      • http://djterm.de/ Robo Term

        your equations doesnt make sense at all.

      • http://www.youtube.com/Tr1pTr0p Tr1pTr0p

        Yeah, that math thing… Pfft! Who needs that? /sarcasm

      • http://djterm.de/ Robo Term

        and what about the hundreds of thousand chinese workers assembling the apple stuff? they’re cheap but they’r not working for free.
        (kind of curious what you will say now. on the other hand i m tired of feeding you….)

      • http://www.youtube.com/Tr1pTr0p Tr1pTr0p

        I don’t think you read the article. The estimate does seem pretty low, but keep in mind the numbers are per device.

      • Blake

        Most companies mark the cost of a product up an average of at least 400%. Apple is not the only one that does this. That is the consumer world, everything is that way. You need to do your research before you start making absurd speculations. Here is a great example of price mark ups. The average family size car costs about $1,255 to manufacture, and if you are talking a luxury car, about $2745. Do you see those cars being sold for that much? No, they are marked up when the company sells them to the dealership, and then they mark them up to make profit. So we will just say $20,000 for the car. There is no cost that could make the car cost that much, whether it is shipping, paying employees etc. It doesn’t matter. This is the consumer world and all companies do the same exact thing.

      • http://www.youtube.com/Tr1pTr0p Tr1pTr0p

        Thanks for replying with a great point. Good to see, for a change, even though I don’t think you could compare the two because of vastly different price margins. Cars cost a lot more to develop, manufacture and especially ship.

      • Blake

        True, but to an extent, that cost is the total cost that it has o the company maker (for example GM) so it costs them 1,255, they make like 8700 and then the car dealership makes 10,000. That is a huge profit margin. But that same concept is applied to virtually anything on the market.

    • 1337lolzorz

      It doesn’t cost much, they just go on cydia and steal everything they see.

    • http://www.bluebugle.org/ Lenin VJ Nair

      Iphone sells in millions not tens. manufacturing cost at 200, and profit of 400 dollars would mean, 400 million dollars in profit for 1 million sales. how many software developers does apple employ? let’s say ten thousand. and they are given 400,000 per annum. that would be 4 billion (profit from 10 million iphones). this is a highly far fetched estimate isn’t it. and yet iphone sells in hundreds of millions and no employee gets that big salary per annum even average salary would be much less.

      • http://djterm.de/ Robo Term

        come on! you had two months to answer and thats all????

  • soundmanbrad

    Hey Guys,

    I don’t know about you, but I am a capitalist and I believe in the free market. I could care less how much profit Apple gets per iPhone. They make a product that I want and enjoy using. Not only that, I, and many others, are willing to pay their asking price for their wonderful products.

    Who cares how much profit they make!

    • http://www.facebook.com/brian.amesse Brian Amesse

      They should make it more expensive then! TROLOLOLOL

  • http://www.facebook.com/AlexandroMagno Alejandro Echevarria Gil

    is this supposed to be news to anyone? THEY ALL do, apple, samsung, nike, hp and the list goes on. we know they pay next to nothing for manufacturing in china and they charge us a fortune and we are willing to pay for it (sadly) byt anybody hating on apple for this needs to hate on all. i personally simply chose not to byt nike stuff unless is at an outlet AND on discount. for reasons like having a manufacturing ship on international waters to avoid paying taxes on china.
    bottom line i dont care much about this.

  • Ariel

    Who Cares How Much Profit They Make ??? At The End Of The Day There Giving Us The Product We Want And Theres Nothing We Can Do But Complain About There Prices !

    • http://www.facebook.com/brian.amesse Brian Amesse

      Or buy something else… SMH

  • http://www.facebook.com/brian.amesse Brian Amesse

    Keep on buying apple products, THEY LOVE IT!

  • http://www.facebook.com/kushinda.perera Kushinda Perera

    the a6 chip cant be soo cheap

  • http://twitter.com/txflipmd Lee Capili

    Does that total include the aluminum casing or is that covered under “mechanical”?