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iPhone 5’s base components cost Apple $207, according to analysis

iPhone 5

BECK DIEFENBACH/REUTERS Apple Inc. senior vice-president Phil Schiller, speaks about the iPhone 5 at a media event last week. A new analysis of the popular smartphone says the cost of materials for the basic model has risen slightly to $ 207.

The cost of building the base model of Apple Inc.’s new iPhone has risen slightly to $ 207 (U.S.), thanks to more expensive display and wireless components, a report said Wednesday.

But even with the increase the device-maker, based in Cupertino, Calif., still enjoys a healthy profit margin on the 16GB version of the iPhone 5, which retails for $ 649 without a contract.

A virtual teardown by market intelligence firm IHS iSuppli of the handset estimates that the hardware cost has risen to $ 199, up from an estimated $ 188 for the iPhone 4S in October 2011.

After adding an $ 8 assembly cost, the 16GB iPhone 5’s price for “bill of materials” (excluding labour, software and other costs) is about $ 207. The 32GB version is $ 217 and the 64GB model $ 238. The 32GB version retails for $ 749 and the 64GM model sells for $ 849, both without contracts.

The display (with a cost of $ 44) and the wireless section (about $ 34) are the most expensive components of the base model. The 16GB flash chip is among the cheaper parts with a $ 10.40 cost.

“NAND flash continues to come down in price as manufacturing processes for these memory chips become more advanced,” said Andrew Rassweiler, senior principal teardown services analyst at IHS. “And because it is the world’s largest buyer of NAND flash, Apple gets preferential pricing. Apple’s massive leverage in this market is reflected in our price estimate.”

IHS said the iPhone 5’s larger display — at 4 inches diagonally, compared to 3.5 inches for the iPhone 4S — and the inclusion of the new in-cell touchscreen technology account for most of the increase in manufacturing costs.

The addition of high-speed 4G LTE technology and a more powerful processor drove up the cost of the wireless section of the device.

IHS said virtual teardown information is based on an analysis of the specifications announced by Apple, combined with public information about components and suppliers. It said the estimate is subject to change pending an actual physical teardown of the device.

UBM TechInsights, in a report last Friday, estimated considerably lower hardware and manufacturing costs of at $ 168 for the 16GB iPhone 5.

thestar.com – Business

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