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This is the No.1 reason why Apple is replacing the iPhone 5 with the 5c

September 24th, 2013 at 11:05 AM
Apple iPhone 5c BOM Analysis

When it launched the iPhone 5c this year, Apple broke its long-standing tradition of keeping its most recent high-end iPhone model on the market and selling it out a discount. And now we have a good idea of why: It’s all about money. AllThingsD points us to a recent iPhone teardown conducted by IHS estimating that it costs between $173 and $183 to build an iPhone 5c, which means that it’s around $20 to $30 cheaper per unit to build than the now-discontinued iPhone 5. The math for Apple is pretty obvious in this case: It could either keep producing a hard-to-build high-end model and sell it on contract for $100 as it’s done with other older iPhones, or it could produce an easier-to-build model for less money and sell it at the same on-contract price. Seen from this perspective, it’s easy to see why Apple isn’t too worried about the 5c cutting into its margins anytime soon.

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