“David Carey, Portelligent’s CEO, did something that few others in the country did after buying an iPhone: He took it apart,” Arik Hesseldahl reports for BusinessWeek.
“Portelligent estimates that the cost of the materials used in the iPhone add up to about $200 for the 4-gigabyte version, which sells for $499 and about $220 for the 8-gigabyte version, which sells for $599. Their estimate doesn’t include costs of final assembly, but it does give some insight into the gross margin on the device. Historically Apple’s gross margins have run ball park of 50% plus or minus a few points,” Hesseldahl reports.
Hesseldahl reports, “The most expensive component on the phone, Carey says, is the touch screen, for which Apple tapped a little-known German concern called Balda… Another big winner is Samsung, which supplied the main microprocessor chip. It was stamped with an Apple logo, but with a serial number that matches closely a chip that Samsung sells… based on a core design that is owned by the British chip technology licensing firm ARM Holdings (ARMHY)… At least one other ARM-based chip, from NXP Semiconductor, the former chip division of Royal Philips Electronics, shows up in the iPhone… Three chips are involved in [power management]: one from Philips, one from Texas Instruments (TXN), and one from Linear Technology (LLTC).”
“Handling various aspects of the wireless communications on the iPhone, from connection of AT&T’s wireless voice and data network to local Wi-Fi networks, are components from Infineon (IFX), Skyworks (SWKS), RF Micro Devices (RFMD), and Marvell Technology Group (MRVL),” Hesseldahl reports.
More details, including which component makers made it into Apple’s iPhone, in the full article here.Full article here.
[Thanks to MacDailyNews Reader “Linux Guy And Mac Prodigal Son” for the heads up.]
Keep in mind that Apple plans to book iPhone revenue spread over a number of months (24 months?). So the weekend ~$0.5B in revenue that people are getting excited about wwill be blended into Apple’s financials over time.
Others have already explained that the NRE that went into iPhone R&D is irrelevant to the iPhone’s Marginal Cost. Well done.
But my question is this… this estimate proscribes a $20 difference between the materials cost of the two models of iPhone. Even with a million-unit bulk discount, can you buy 8GB of Flash for only $20 more than 4GB?
MDN Magic Word: money. Of course
@Chrissy,
You misinterpreted my point. I was simply stating that these initial breakdowns are usually wrong… When Apple TV first came out, the initial breakdown reports suggested that Apple had a killer profit margin when it turns out they are making very little.. The same could be true for iPhone. I don’t trust these reports one bit.
The big item NOT included in any of these hardware estimates is OS X and the development costs included in the software. That is going to be a healthy chunk of the iPhone’s sales price also, but of course, people will key on the hardware costs and think Apple is charging too much for the iPhone.