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Summary:

Like clockwork, IHS iSuppli mercilessly tears down new iPhone models and exposes their inner works, looking to devine the secret of their manufacturing and components costs. On Thursday, the firm released its analysis of the latest and greatest, the iPhone 4S.

Credit: IHS iSuppli

Like clockwork, IHS iSuppli mercilessly tears down new iPhone models and exposes their inner works, looking to divine the secret of their manufacturing and components costs. On Thursday, the firm released its analysis of the latest and greatest, the iPhone 4S.

The base model 16 GB iPhone 4S carries an estimated bill of materials (BOM) of $188 (only $0.50 more than the iPhone 4), which accounts for all the parts used in its construction, including flash memory, DRAM, processor, antennas, battery and sensor. The 32 GB and 64 GB models are identical to the 16 GB variety, save for the inclusion of additional flash storage. The estimated manufacturing cost in each case adds only $8 to the BOM. Here’s a full breakdown of the costs associated with each model of iPhone 4S:

IHS iSuppli notes that these costs don’t include software, licensing or other expenditures associated with creating and designing a phone.

The teardown also revealed some interesting new components contained in the iPhone 4S, not in its predecessor. These include the redesigned cellular network antenna that IHS calles “unique” in its ability to support all carrier partner network technologies, when compared to the approach taken by most of Apple’s competitors.

The firm also highlights the Avago power amplifier module, which “amplifies a radio signal prior to transmission.” IHS explains why this is an important addition to the iPhone:

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.

Another new supplier discovered during the teardown is Hynix, which provides the NAND flash memory for the specific unit disassembled by IHS. Toshiba is another known source for the iPhone’s flash storage, but if Hynix is a new supplier as IHS believes, that’s a major boon for the company, since flash is either the most expensive or second-most expensive component in the iPhone, depending on which model you’re looking at.

It looks like Apple hasn’t sacrificed its margins in order to deliver a more advanced device with the iPhone 4S. What are your thoughts on the latest iSuppli breakdown?

  1. If it costs $200 to make, how come they charge $700 out of contract? A $500 mark up? Apple can kiss it. I’ll never regret going android

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  2. licensing costs, import and export costs, etc. can drive their actual costs to easily another $3-500.

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    1. The above exploited statement shows the rivals are interested to make the image down of APPLE.

      HAHAH LOL! There are some brains put to make this device robust..where is the cost invloved for makeing iOS 5…all developer pain goes in vein?

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  3. The above exploited statement shows the rivals are interested to make the image down of APPLE.

    HAHAH LOL! There are some brains put to make this device robust..where is the cost invloved for makeing iOS 5…all developer pain goes in vein?

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  4. The concept is almost everything is value based priced and not cost based. CBP is not efficient and it does not let companies convey the true value of the item. There are about a million books about this. And it is not surprising! Plus, Apple makes things in bulk – they achieve economies of scale and hence can reduce cost. If you wanted to build just one single iPhone 4S then it will cost you quite a lot – I would say around 600 or so (statistically). This is nothing – it cost Amazon 85.15 to make a Kindle when they were selling it for 259! I consulted for Amazon and we suggested a drop in price along with other strategies that I cannot disclose and now you see the new picture of Kindle!

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