“The estimate doesn’t include costs for items such as labor, shipping, advertising, software development, or patent licensing,” Hesseldahl reports. “iSuppli analyzed a 16-gigabyte version of the iPhone 4. As with the iPad, Apple used an internally designed A4 processor that was made by Samsung Electronics (005930:KS) and costs an estimated $10.75, says El Segundo (Calif.)-based iSuppli.”
Hesseldahl reports, “Suppliers include Broadcom, which makes a wireless chip that handles Wi-Fi and Bluetooth connections on the device. Broadcom, based in Irvine, Calif., also supplies a chip to receive signals from global positioning system satellites used in navigation applications, replacing one that previously had been supplied by Infineon Technologies of Neubiberg, Germany… iSuppli said Geneva-based STMicroelectronics supplied the gyroscope chip at an estimated cost of $2.60, as well as an accelerometer chip used in previous iPhone versions, which has an estimated cost of 65¢… The glass overlaying the display that creates touch sensitivity is likely manufactured by two companies, Keller said. One is Wintek, based in Taichung Hsien, Taiwan. The other is TPK-Balda, a joint venture of Balda, based in Bad Oeynhausen, Germany and TPK Holding, based in Xiamen, China… Other component suppliers include Skyworks Solutions, a wireless chipmaker based in Woburn, Mass,, and TriQuint Semiconductor, based in Hillsboro, Ore.”
Read more in the full article here.
Nice to see some parts made in the USA
The cost is 187 and they sell it for 199? Sounds more like Dell than Apple. How do they make money on that?
@Karlv: Telco subsidies. They probably sell the devices to telcos (AT&T;etc.) for upwards of $600.-
@ Karlv – AT&T;in the US subsidizes the price. AT&T;is selling it to you for $199 – NOT Apple. AT&T;will more than make up for the difference with the required 2 yr contract. Doesn’t sound anything like Dell to me … it sounds a lot smarter than Dell could ever hope to be.
“The estimate doesn’t include costs for items such as labor, shipping, advertising, software development, or patent licensing,” Hesseldahl reports.”
…or research and development, design, testing, FCC certification, warranty costs, etc.
Just call it what it is – an educated analysis of component costs – rather than list everything that it is not. No one outside of the company (excluding third party auditors) has enough insight into Apple’s books to know the complete costs of their products. All that you can track are macro parameters like gross margins. As long as gross margins remain reasonably high, then Apple is *not* following Dell into the pit of mass market profitlessness.
Who made the antenna?
“it costs $28.50 and may have been made by LG Display”
They quote the price of the display to three significant figures yet they’re not even sure who makes it. I smell FUD. These iSuppli things are meaningless.
“They quote the price of the display to three significant figures yet they’re not even sure who makes it. I smell FUD. These iSuppli things are meaningless.”
– I count 4 sig figs… but, it’s been a while since i took that class.
Parts cost ONLY, this doesn’t include R&D;, Software development, marketing, packaging etc…
For example.. I’m a musician, it costs me about $1.50 to press a cd, although it took two years of work to write, produce and record that cd.
Arik Hesseidhal has a history of mind farts, and a very low credibility rating with people who remember his rants over the years, he’s a pop-tart.
The point is that Apple have considerable margin over estimated component costs. Also if memory serves me correctly the cost is similar or even lower than previous models.
Apple are kicking ass in this market and have a very attentive audience for both the end users and the distributors.
Good job guys – keep it up.
Has someone done a parody of iSuppli, where a human life is only worth a few dozen dollars (cup full of various minerals, few buckets of water)?
@mgargan1
I stand corrected. I forgot that trailing zeros to the right of the decimal point are significant while trailing zeros to the left of it are not. It’s been a very long time since I took that class.
I wonder if that’s capacitive glass on the back.