The iPhone 4S Only Costs 49 Cents More To Make Than The iPhone 4 [Report]



Despite its new dual-core A5 processor, its much-improved 8-megapixel camera, and a wireless chip that allows the device to use both CDMA and GSM networks, Apple’s new iPhone 4S only costs the Cupertino company around $0.49 more than the iPhone 4.

Research firm IHS iSuppli has torn down Apple’s latest device and estimates that its 16GB iPhone 4S costs $196 to make — that’s $188 in parts and $8 manufacturing costs. The 32GB model costs an additional $19 at $215, and the 64GB model costs $254. All three devices are identical internally, apart from the differences in flash storage.

That price includes all of the iPhone 4S’ internals, including its display, cameras, battery, flash storage, and antennas. However, it does not include software, licensing, or other costs that are associated with creating and designing the phone.

IHS iSuppli’s teardown has revealed some interesting thing’s about the latest device, including a new cellular network antenna, which the firm describes as “unique” in its ability to support multiple network technologies. It also mentioned the device’s Avago power amplifier module, which “amplifies a radio signal prior to transmission.”

What makes the converged Avago part unique is its capability to support both 2G and 3G cellular technologies across multiple bands thus reducing the number of components and PC board footprint required.  While Avago is by no means the only company supplying these types of devices, it is the first to be implemented by Apple.

IHS iSuppli also discovered another supplier during its teardown, with flash memory built by Hynix. Some devices feature flash memory built by Toshiba.

[via GigaOM]

  • bppump911

    That was a really nice article, but leaves a few unanswered questions. First, where are the cost estimates for the components found? Second, where is the build cost found. Third, what about costs of shipping, packaging, etc. And perhaps most importantly, where are the “real’ costs? By “real” costs I mean, inter alia, the following: R&D, advertising, allocable share of Apple’s overhead (rent, employees, etc.) and other “indirect” costs. If those costs all were properly added together, my bet is that the real “cost” to Apple for each iPhone is significantly higher. Now don’t get me wrong – I realize that Apple still has a very healthy profit margin. But tearing down the phone and estimating the cost of its parts is akin to valuing a human based solely upon its physical composition (ok, maybe that was a bit extreme). The point is that the iPhones cost a great deal more than shown, and that the cost to the carriers is significantly higher as Apple must make its healthy profit. The carrier subsidies to consumers are quite significant, demonstrating the value of those customer contracts. So in all, a nice piece, but an incomplete picture.

  • 300AShareMakesMeSmile

    If it’s true that the iPhone 4S only cost that much more then that’s huge.  I’d heard the camera was rather expensive, much more than the older camera, so I don’t know why it’s the same price in this list.  With the A5 processor packing so much power, it seems like a bargain.  Keeping costs so low while keeping quality high is going to be tough for rivals to beat.  The whole iPhone 4S upgrade should pay for itself in no time at all.

  • CharliK

    “However, it does not include software, licensing, or other costs that are associated with creating and designing the phone.”

    so actually the headline is a lie. Because the iPhone 4s and the iPhone 4 potentially cost a lot more than this survey claims.