iSuppli: iPhone 4 components cost $188

By on Jun 28, 2010 at 12:02 PM
mobile June 28, 2010

iFixit iPhone 4 teardown

Bloomberg Businessweek writes that Apple’s 16 GB iPhone 4, which retails for $599 off-contract or $199 on-contract, costs approximately $188 to manufacture. The report comes as a result of an iSuppli teardown that analyzed the inner workings of the new mobile device. The most expensive part is — unsurprisingly — the Retina display, which iSuppli estimates at $28.50 at wholesale. Apple’s A4 processor, which is manufactured by Samsung, purportedly carries a price tag of $10.75. Both Apple and Samsung declined comment when contacted by Bloomberg BW. The $188 estimate is in line with previous iterations of the iPhone which typically have cost between $175 and $190 to manufacture.

UDPATE: Changed article title from “iSuppli: iPhone 4 costs $188 to manufacture” to “iSuppli: iPhone 4 components cost $188.” The $188 figure does not include labor and other miscellaneous costs that would be included in manufacturing; it is for the components only.

[Via MobileCrunch]

Image sourced from iFixit.

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  • jack black

    Yeah but we cannot forget the cost of labor and export taxes and tariffs. With the $199 price tag, they’re not making any money. All the money is made on the applications/ iTunes, accessories that are made by Apple directly and kickbacks from other accessory manufacturer’s and AT&T

    • Erin

      Jack Black

      The money is not made on the applications and accessories. Only a relatively modest amount is made there. They make the money selling the phone, and as you suggest the cost to manufacture the phone is more than the sum total of its component parts.

      Erin

      • Sprinter

        Over a billion iPhone apps have been downloaded alone. Add in music, movies, and apps for the iPad and iPod, and you can see why the iTunes platform is the envy of so many companies.

        iTunes is a fuckin’ cash cow.

    • sirpaul

      They are making money enough money off the phone, trust me. When you buy the phone for $200, you are buying it on contract. If you buy off contract it will cost you somewhere around $700 dollars. When Apple sells its phones to AT&T they aren’t selling them for $200 for att to resell again for $200. They probably sell them for around $500-600. ATT makes the money ($300-400) back from the contract agreement.

    • ganapadee

      Kindly refrain from pulling stuff out from your butt.

  • Erin

    That’s not what it cost to manufacture. Sounds to me to be more what the individual hardware components cost.

    If I’m right, then you should edit your report to be more accurate, otherwise it is highly misleading.

    Erin

    • Andrew Munchbach

      Good point and a slight oversight on my part. I’ve adjusted the article title and put a note at the bottom as to why.

      Thanks!

  • Flash T

    I wonder how much extra it would cost to get the iPhone 4 to be able to make a phone call.

    • Jarrett

      You are an idiot.

      • JMR

        Another two brain cell generated response

    • lunchbox

      You are a genius.

  • zack

    I don’t see an antenna system.

    • SJ

      They took it apart wrong.

      • RoBoBear

        Did Steve Jobs tell you that?

      • SJ

        Yeeeesss mmaaaassssttttteeeeerrrrr

  • Seth

    Yeah, these articles always bother me as a business person. The phone costs a TON more than that to make. In the industry that I’m in, component costs are only about 30% of the total cost of our product, labor and other overhead are much more than the component costs.

    It’s articles like these that lead to moronic consumers that feel like everyone is ripping them off.

    The title should read “Components from iPhone 4 cost $188″ instead of that it costs $188 to manufacture as that sounds like it includes “manufacturing” costs, and it does not.

    • John

      @Seth

      Right on. As a product manager, I know exactly what you mean. These iSuppli estimates and articles are stupid and make uninformed people think Apple has a 3x profit margin.

      There is a so much more that goes into building a product than just the cost of raw materials. The price of each iPhone pays for its components, manufacturing costs, third-party contracts and licensing agreements, transportation, marketing, sales commissions, R&D, software development, product support and many other things.

      Yes sure there is a profit margin. But its NOT as big as you think.

      • ganapadee

        33% PM is not as big as you think? Are you on crack??

      • John

        @ganapadee
        When you don’t know what the fuck you are talking about, it’s best to just shut the fuck up.

        Apple has the biggest profit margin in the industry, approximately 52%. RIM has over 40%. Nokia and HTC are around 32-33%. It’s no where close to what people think it is by these junk iSuppli estimates. Stop smoking crack yourself and go get a degree you turd.

      • skyy_flyer

        When you can’t make an argument without cussing, as contary to popular belief it does not add validity nor emphasis to whatever point your attempting to make, than you right off the bat sound unintelligent.

      • JR

        True, who knows what the Break Even point is, but I bet they’ve hit that mark already or soon will. Not only that they talk about $28 for the display and $10 for the chip, but what is the real cost when you factor in that they purchased MILLIONS of each component. Sorry, but once they hit the BE, it’s ALL profit for them because they are selling so many of them.

  • Shotinthenads

    What about the 10 cents in slave labor in China

    • Jumper

      I think you nailed it. With so much talk from people who “know so much about production”, where are the products being produced that your experts on cost to manufacture, USA or a Suicide Factory where I highly doubt that it’s costing Apple hundreds to add onto the $200 cost for components.

  • Cynikal.Mindset

    so, where can I buy said pieces for cheap and build my own phone?? hahaha

  • mingkee

    Hey
    How much money is paid to workers for manufacturing iphone 4?

  • michael scott

    That is mind blowing, magical, etc., etc.

    NOT!

  • Len

    Wow, that’s the first time BGR has updated a title and to no surprise, it’s to paint Apple in a more positive light so Apple users don’t feel so ripped off by their toys… WOW I didn’t see that one coming BGR.. lol

  • TomCruise

    are these component prices wholesale or retail? as somebody said above Apple would be buying components in bulk to make millions of units, not a handful.

    and why would apple be in business only to make “not enough profit margin”?

  • JR

    It’s BS because they are only talking about the cost of one phone not MILLIONS of parts. The chip based on say 5 million of them might cost .50 each and the screen $3. And you have to factor labor, R&D and manufacturing but I would say that the REAL cost is no more that $40 each. That is WAG without knowing any real numbers but it certainly isn’t $188 each.

    Sorry folks but your theory that they don’t make money on the phone but make it on iTunes and service is NOT correct, any profits from that are ALL gravy. Remember, Apple’s last QUARTER PROFITS where in the BILLIONS! That is just crazy.

  • joe

    You have to also consider how much it cost to develop the software. Marketing. Legal costs. etc etc. The phone is more than just damn the components. Still, they wouldn’t sell it if they weren’t making a profit. I say charge as much as they can get away with as long as people are still lining up for days in advance to get the thing.

  • dirtypirate

    ***gotta add the cost of those funerals into the equation.

  • Evandeboss

    they don’t lose money. It’s 199 from the carrier because the the carrier subsidizes it…meaning they pay for a large portion of the phone while the consumer pays the rest. Apple gets the money as from retail value and the carier makes $ from expensive plans and contracts with crazy data and fees.

  • LF

    When will people get that the phones price has nothing to do with its cost. It’s all about what the market will bear.

  • http://alghienkad06.student.ipb.ac.id thea

    cool

  • ralph

    the iphony 4 will be a red and blue issue soon a areeveryone will get an iphone or an iphony8 and you apple sheeps will become goats kissing bottom . grow up and face the real world. apple is your master and you are the kiss a. slaves. may the mac be with you.

  • http://xfxf ralph

    i did.

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