Apple's new iPhone 4 costs almost $20 more to make than its
predecessor, the iPhone 3GS, but the device will still help
the company continue to rack up high profits, the research
group iSuppli said Monday.
According to iSuppli Corp.'s Teardown Analysis service,
the 16Gbyte version of the iPhone 4 carries a BOM of
$187.51, based on a preliminary cost estimate derived from
a physical teardown of the product.
Apple's iPhones cost consumers $199 or $299 with a two-year
wireless contract in the U.S., but such low prices as those
are heavily subsidized by the wireless carriers.
"Just as it did with the iPad, Apple has thrown away the
electronics playbook with the iPhone 4, reaching new
heights in terms of industrial design, electronics
integration and user interface," said Kevin Keller,
principal analyst, teardown services, for iSuppli.
"However, the BOM of the fourth-generation model closely
aligns with those of previous iPhones. With the iPhone
maintaining its existing pricing, Apple will be able to
maintain the prodigious margins that have allowed it to
build up a colossal cash reserve?one whose size is exceeded
only by Microsoft Corp."
iSuppli estimated the BOM of the 3GS in 2009 at $170.80;
the 3G in 2008 at $166.31 and the first iPhone in 2007 at
One of the most apparent examples of the
iPhone 4?s design innovation is its completely redesigned
housing. Unlike the unibody housing of previous models, the
iPhone 4's enclosure is composed of multiple pieces,
allowing it to accommodate a considerably larger battery as
well as the much-discussed integrated antenna.
"The metal housing of the outer enclosure serves as a
physical antenna, a tough task to design and manufacture
because antennae pieces have to be insulated from other
parts, and yet be rigid around the perimeter," Keller said.
"This adds more complexity and cost, but elegantly uses
every possible cubic millimeter of the iPhone for function,
and not just form. The tight intertwining of form and
function is an area where Apple has always excelled."
The wireless subsection of the iPhone 4 is far smaller than
in previous members of the line because of greatly
increased integration of the Radio Frequency (RF)
functionality into the core chipset components, despite the
presence of an additional air standard: High-Speed Uplink
Packet Access (HSUPA), which allows the uploading of
bandwidth-intensive HD video.
"Out of the nearly 300 cell phones torn down by iSuppli,
the iPhone comes the closest to integrating the entire
wireless interface?including all the supporting Radio
Frequency (RF) modules on a single chip," Keller said.
"This further enhances the iPhone 4's space efficiency and
serves as yet another testament to the advanced state of
The LCD display represents the single most expensive
component in the iPhone 4, costing $28.50 and accounting
for 15.2 percent of the product's total BOM. The 3.5-inch
display uses advanced Low-Temperature Polysilicon (LTPS)
and In-Plane Switching (IPS) technology, and features a 960
by 630 resolution?four times that of the iPhone 3GS.
While the display is not labeled, iSuppli believes the most
likely supplier is LG Display. Toshiba Mobile Display (TMD)
also could serve as a source for the part.
The next most expensive single component is the NAND-type
flash memory. In the 16Gbyte version of the iPhone 4, the
NAND costs $27 and accounts for 14.4 percent of the BOM. In
the individual iPhone 4 torn down by iSuppli, the NAND
flash was supplied by Samsung Electronics Co. Ltd.,
although Apple could be employing other sources as well.
Samsung also supplies the next costliest part, the 4Gbits
of mobile Double Data Rate (DDR) SDRAM, priced at $13.80,
or 7.4 percent of the BOM.
Following on the value ranking is the baseband Integrated
Circuit (IC), at $11.72, or 6.3 percent of the BOM.
Infineon Technologies AG is the supplier of this part,
iSuppli's teardown reveals.
Next on the component cost countdown is the A4 applications
processor, manufactured by Samsung but using Apple's
Intellectual Property (IP). iSuppli estimates the cost of
the A4 at $10.75, or 5.7 percent of the iPhone 4?s BOM.
Subsequent on the cost list is the capacitive touch screen
with reinforced glass, at $10.00, or 5.3 percent of the
BOM. While the supplier of the touch screen is not labeled
and thus cannot be determined through a teardown analysis,
iSuppli believes the source is TPK and/or Balda.
The main camera on the iPhone, a 5-megapixel autofocus
device, costs $9.75, and accounts for 5.2 percent of the
BOM. Like the touch screen, the camera cannot be identified
from a teardown.
The Wi-Fi Bluetooth controller IC, priced at $7.80 and
representing 4.2 percent of the BOM, is supplied by
Other parts in the iPhone 4 include:
- The $5.80 battery, with an unknown supplier
- NOR flash, supplied by Intel Corp./Numonyx; and Double
Data Rate (DDR) mobile DRAM, provided by Elpida Memory
Inc., at a combined cost of $2.70.
- A $2.60 Microelectromechanical (MEMS) gyroscope, supplied
- Infineon?s $2.33 quad-band GSM/Edge transceiver
- The $2.03 main power-management IC from Dialog
- A Global Positioning System (GPS) chip from Broadcom,
- Texas Instruments Inc.'s touch screen controller IC, at
- Cirrus Logic's $1.15 audio codec
- An e-compass from AKM Semiconductor Inc., at 70 cents
The accelerometer, provided by STMicroelectronics, and
costing 65 cents