“A 16 gigabyte iPhone 5S costs Apple $213 in materials, while a 16 GB 5C comes in at $156, according to a report published Monday by UBS,” Ben Rooney reports for The Wall Street Journal.
“The teardown shows the big saving that the ‘unashamedly plastic’ case of the 5C represents, coming in at $42 less than the aluminum body of the 5S,” Rooney reports. “The other big saving is the $7 fingerprint sensor.”
Rooney reports, “Apple lists an unlocked 16 GB iPhone 5S on its site at $649 and an iPhone 5C at $549. In a report of exacting detail, UBS estimates gross margins of around 50% for both devices.”
Read more in the full article here.
MacDailyNews Take: The healthier Apple’s margins, the better. The opposite? See Dell.
Also, of course, these are materials costs only and do not include assembly, shipping, marketing, packaging, R&D, and other costs associated with bringing these best-in-class products to market./blockquote>
Related articles:
Teardown shows iPhone 5s costs Apple at least $199 to build, minimum of $173 for iPhone 5c – September 24, 2013
Newsflash: Apple sells premium products at premium prices to premium customers – October 23, 2012
Wouldn’t it be better to compare the price of the 5C against the 5 which determining the cost savings of the case?
You would think so since analyst would want to know (predict) Apple’s earning per share. But when has that ever influenced Wall Street about Apple. On this news Apple was probably downgraded with limited outlook on growth due to current high profitability.
That tear-down was done a year ago. Why do it again?
If you want to compare the 5 to the 5c, all of the numbers have been published for you to do it.
Here’s an interesting comparison: Last year the cost of the 32 bit A6 application processor was $17.50. This year’s larger, faster 64-bit A7 costs $17.89 — only 2% more. Meanwhile, the cost of the A6 has dropped by 20%, to $14.05.
iPhone 5 teardown (2012):
http://www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-$199-BOM-Virtual-Teardown-Reveals.aspx
thats one of the coolest info graphics done lately! good job!
My sister picked up a blue 5c, and put a very thin black case on it. It is a handsome looking phone, quite light, and feels great in the hand. I was expecting to be underwhelmed by the 5c, but instead I am now considering a 5c as opposed to a 5s. The 64 bit processor of the 5s is the only real selling point in my eyes.
I learned too painfully years ago that you should never skimp on memory or processor speed. Eventually, you will regret saving a few bucks when the truly usable lifespan of your purchase ends a year or more earlier.
I had the last model of PowerPC iMacs that I bought just as the first Intel iMacs were coming out because they were discounted about $200 or so. Big mistake. That iMac became obsolete much sooner. I predict the same will happen to non-64-bit iPhones.
I noticed that buying used Macs: that extra bit of CPU power or better graphics card makes all the difference in whether an old computer can still be useful. If it was the baseline or cheaper model several years ago, then it’s usually just too slow to even consider using nowadays.
The cycle for desktop PCs is different than for mobile devices. And don’t minimise or disparage the fashion selling points of the latter, which the former lack altogether.
As for 64-bit convergence, that shouldn’t happen anytime soon, for a number of reasons. First, it’s not a real selling point for mobile at this stage; second, it adds costs that can’t easily be recovered precisely because of that; third, the tech is too advanced for competitors to quickly replicate; and fourth, it was a surprise to the industry—clearly a strategic move by Apple whose dimensions are not yet comprehended by knee-jerk competitors.
I wonder what the allowance is per phone for legal fees dealing with all the patent trolls who come out of the woodwork every time Apple releases a new device.
5C 16mg = $550.00
5C 32gb = $650.00
5S 16gb = #650.00
Difference between 5C 32gb and 5S 16gb is 16gb more in storage for the 5C. Cost is the same.
Difference between 5S 16gb and 5C 32gb is 16gb less in storage for the 5S, but a more powerful 64-bit cpu, better camera, the M7 co-processor, a finger print sensor and a metal case for the 5S. Cost is the same.
Now, either the 5C is too expensive or the 5S is too cheap.
Neither.
A mark of a product at the correct selling price has nothing to do with BOM.
It always cracks me up reading these articles about the coat of the iPhone guts.
What defines a correct price is sales rate. If it’s flying off the shelf, it’s too cheap. If it’s sitting on the shelf, too expensive.
Why do we love Apple? Based on the current sales rate the iPhone is too inexpensive. Apple’s S&M would, if they were another company, try to find ways to increase the price.
Companies keep prices low to try to gain market share. Apple is just being nice….and trying to gain market share.
Enjoy the awesome quality of the iPhone. Any other company would look at manufacturing costs and reduce the quality to line heir own pockets. Apple is lining your pocket.
The only way to examine the cost of the iPhone is to look at margins. if Apple is at 30%, it costs $450 to make the phone.
I reckon that the major advantage to Apple with using plastic cases for their second tier iPhones is that it frees up the automatic milling machines so that they can make more cases for the 5S. Those machines are hugely expensive and Apple can make excellent use the capacity of every last one of them, so by using plastic to make the cases for the 5C, Apple can eliminate one of the pinch points in the iPhone 5S manufacturing chain.
It’s a triple win for Apple. They can maximise production of the 5S. The 5C will be cheaper to make and more efficient to assemble. The 5C gets a distinguishing feature ( choice of colour ) to clearly differentiate it from the more expensive 5S.
Somebody is smoking something really strong as there is no way on earth an aluminium body costs $42 more than a plastic body, simply because an aluminium body is nowhere near $42 to make.
My father owns a pression engineering company in the west of England and I approached him and the head of engineering to have an aluminum body made for my 3GS when it first came out.
Total cost for a 1 off, scanned from the original plastic body was £70.
The old man recons production run of 5 million would be no more than $20 each, and that’s leaving him a huge margin.