Friday, October 21, 2011

Ever Wonder How Much It Costs to Make the iPhone 4S?

How much do you think it costs to make the iPhone 4S? Apple is charging anywhere from $199 to $399 for the device, but obviously it doesn’t really cost that much to manufacture it…does it?

According to a breakdown that was released by IHS iSuppli on Thursday, October 20, all of the materials for the 16GB iPhone 4S come to a total of $188. Then if you also add in the manufacturing costs, the total goes up to $196. If you add gigabytes to the device, the price will increase further. A 32GB device costs $207 and a 64GB phone costs $245.

Although the outside of the iPhone 4 and the iPhone 4S are completely identical, iSuppli said that the inside of the iPhone 4S offered a "wealth of innovation." "Key among these changes is a custom part from Avago that helps give the iPhone 4S its unique capability to be used in multiple wireless systems globally, while still keeping costs down," Andrew Rassweiler, senior director of teardown services for IHS, said in a statement. "In another surprise development, the 4S employs a Hynix NAND flash memory device. While IHS has already confirmed multiple suppliers for this part, it does mark the first time that IHS has identified a Hynix NAND flash in an iPhone, as opposed to devices from Samsung Electronics Co. Ltd. or Toshiba Corp. seen in all previous iPhone and iPad teardowns."

The wireless parts incur a chunk of the cost, totaling $23.54 in all versions. The phone also possesses a dual-mode design which iSuppli said was "a unique design approach compared to that used by most cell phone makers, which use different models with unique wireless subsystems to support various wireless carriers' standards."

It also has the Avago component that allows the device to support 2G and 3G technology across multiple different bands. "This is a very special converged approach that gives Apple a real technology lead over most other manufacturers, further reducing the complexity of the radio frequency/power amplifier (RF/PA) section of the iPhone line beyond Apple's already highly-integrated design," Rassweiler said.

Other costs for the production of the smartphone include: $23 for the 3.5-inch display, $14 for the touch screen, $17.60 for the 8-megapixel camera, and $15 for the Qualcomm baseband processor.

"Qualcomm obviously is a big winner in the 4S, with the company now taking sole ownership of the baseband processor position with its MDM6610 device," said Wayne Lam, a senior analyst for wireless communications at IHS. "While the Qualcomm MDM6600 was in the CDMA version of the iPhone 4, the Intel (formerly Infineon Technologies AG) PMB9801 was used in the HSPA model. In the iPhone 4S, Qualcomm no longer has to share the iPhone 4 baseband design win with Intel. It will be interesting to see how Intel responds in terms of winning back this socket in the next design cycle."

Another incredibly expensive aspect of the phone is the memory subsystem. For the 16GB phone it is $19.20, $38.40 for the 32GB version and $76.80 for the 64GB phone.
I don’t know about you, but I personally was surprised at how expensive the phone really is to manufacture. Apple is still making plenty of profit off of it I am certain, but I never would have guessed that it was so expensive to make. I guess it makes sense when you have such a well-made product though. Now I can better understand why the iPhone is so expensive.

Source: PCMag - How Much Does it Cost to Make the iPhone 4S?

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