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iPhone 4S Component Costs Once Again Begin at About $188

nStyle said:
Even if Apple does have more expenditures than the cost of the components themselves, Apple is sitting on 88 billion.

We know these phones are overpriced but we do not care. All phones are. Apple isn't the only one. We should care though.
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Apples cash reserves has what to do with the retail price of the iPhone? I don't understand the connection.

iPhone clearly are not overpriced because a significant people pre-order or line up to buy them. There are less expensive phones available and less expensive phone plans. If the iPhone or iPhone contract prices was so unpalatible consumers would go elsewhere. That is not the case.
 
Chupa Chupa said:
Apples cash reserves has what to do with the retail price of the iPhone? I don't understand the connection.

iPhone clearly are not overpriced because a significant people pre-order or line up to buy them. There are less expensive phones available and less expensive phone plans. If the iPhone or iPhone contract prices was so unpalatible consumers would go elsewhere. That is not the case.
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Oh come on, don't you know that the more money a company makes, the cheaper they should sell their products? I mean, they obviously don't NEED that money, so they should drop all their prices, maybe even sell things at a loss ;)
 
A lot of the responses in this thread would make one think that Apple made $2-$3 on each iphone. It's amusing. Apple made more than $7 billion in profit last quarter alone.
 
Don't be a troll...

iChrist said:
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Wow, people who buy 32gb and especially 64gb are not smart. They pay $100 or $200 more for same phone but extra memory only cost like $10. These peoples not good at math apparently and buy rip off model. Ha. :eek::confused::apple:
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The only price difference in that BOM chart, if you bothered to properly assess it, was under the NAND FLASH material cost breakdown:

16GB = $19.20
32GB = $38.40
64GB = $76.80

Otherwise, all the other BOM line items are exactly the same price ($176.80) regardless of which capacity size is featured for the particular iPhone 4S model. And since you're presumably very good with math surely you've noticed how the above prices doubles in cost as each memory capacity doubles in size, which is reasonable to expect BOM-wise. Therefore you have to pay a little more in general to get more pre-installed flash memory in the iPhone 4S.

But yes, Apple does charge more to preinstall larger HDD/SDD capacities into their systems, but, unlike say with the MacBook Pro, you can't just install extra storage capacity yourself into the iPhone and thus save a few bucks with 3rd party vendors, let alone upgrade it's capacity when you potentially need more space at a later point in time. So the $100 - $200 "value" for extra memory is subjective and is based on one's needs, both perceived and real. But to call those "peoples" who want the extra memory as being "not smart", especially as there is no other alternative to lower the consumer cost on that end, is just unnecessarily rude and prejudiced on your part and contributes nothing noteworthy to the discussion.
 
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milo said:
Right now the 3GS is free...the notion that it didn't go down in price is pretty easy to disprove.

And yeah, the new models cost the same as the old ones did when they were new, but that's true of any technology where the prices are going down AND newer better tech is appearing at those higher price points. Look at the newly announced android phones, at $299 with contract are the new droid and nexus cheaper than the previous top of the line phones?
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Not free. Free at time of contract. Need a contract which in turns pays out the cost of the phone over time.
 
I see lots of room for 512 more megabytes of ram. Sometimes I hate apple but I still love them. They are setting me up to be in an abusive relationship.
 
MonkeySee.... said:
If you want something cheap, go to ikea. If you want quality, go to a carpenter.

Same rules apply here.

I've never felt ripped off buying Apple. :apple:
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Thank you. I can buy no name catsup for 99 cents. But I choose Heinz for $1.99. Better quality and better tasting. But I buy no name cereal. Don't mind the taste and it is way cheaper.

Same thing applies to my work toys like macbook, imac, and iphone. Each to their own. Don't like, don't buy.
 
So what would be the updated component costs for the 4 and 3gs at today's prices? In other words, since they're now selling the 4 in the $99 slot and the 3gs in the free slot, how much do those devices cost now, since presumably the older less advanced components are cheaper now than they were 1-2 years ago...
 
vdoc said:
I took the people who buy 32gb and 64gb are not smart as an insult too so it was a tongue in cheek comment. There are hundreds of other products in the marketplace that follow this pricing strategy. I could say people who buy fully loaded version of a car over a base model are not smart. To each is own and what is important to one is not important to another.

It is called perceived value. The market determines the price.
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You perceive value like most of the population. Congratulations. :rolleyes:
 
Look guys,

I think far too many of you are treating the iPhone as a commodity. Maybe a cheap pay as you go GSM phone that costs £20 is, but the iPhone definitely is not. It is a proprietary product, with software, hardware and cloud services that often can't be shared with other companies. Even more importantly, they keep their products advanced enough that they compete on quality rather than price. Apple have found a way to make their offerings affordable enough to sell loads.

The deal is based on whether or not you think their offering is good value to you, rather on what it cost them to build it. I did buy, and am happy with my 64Gb model.

David
 
perspective...

jmpnop said:
Nobody wants that much internal storage. SD card does the exact same thing for a fraction of price. 16GB costs $200 on contract which is reasonable. $400 for 64GB is twice the cost of 16GB which is too much.
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Are you kidding me?! For $200 more than the 16GB model you're getting 4 times the storage capacity, so the actual value per gig is greater on the high-end model than on the low-end one, like so:

16GB iPhone 4S = $199 ($649*) = $12.44 per GB ($40.56 per GB*)
32GB iPhone 4S = $299 ($749*) = $9.34 per GB ($23.41 per GB*)
64GB iPhone 4S = $399 ($849*) = $6.23 per GB ($13.27 per GB*)

*=unlocked iPhone price

So, it's one thing to say that you personally don't need more than 16GB of internal NAND Flash memory, but it's another thing to suggest that the value per gigabyte of extra memory is "overpriced" in the higher capacity model, which as illustrated above is not when you actually run the numbers.

Furthermore, you can argue that Apple should offer more reasonable bulk rate discounts for higher capacity models, or that they should incorporate removable storage media into their iOS devices, but those are completely different topics in their own right. :cool:
 
Subtract the profits reported for iPhones, average it out over all iPhone generations and you get the profit per phone. Now subtract the average part costs and you get all those other costs like R&D, shipping, marketing, service, etc.
On the other hand, Apple used to get a bit of the carrier's profit so it might not be as accurate. But it should give you an idea.

Besides, it's irrelevant how much the hardware is worth. Look at things like the xBox 360. Microsoft sells those at a loss but make it back and then some with licenses for the games and online services. At least iCloud and Siri are free (hope they don't start to charge extra for extra Siri services).
 
zionicion said:
That isn't a very good margin at all. Most companies aim for an 8-10x margin, not 3.
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Not true. You should think of margins on manufactured technology goods being in the 50% range, varying more or less according to whether they are in highly competitive markets or highly differentiated. Also, high volume, consumer products tend to have lower margins (due to increased economies of scale*) than low volume, industrial products.



*economies of scale give you lower costs, not lower margins; however, they tend to end up being passed on to the customer as lower margins due to competitive pressures. You didn't really need to know this, but according to macroeconomic theory commoditization leads to pricing at marginal cost, where accounting says you take a loss when pricess fall below average cost. Aren't you glad you asked? :)
 
MrCrowbar said:
t make it back and then some with licenses for the games and online services. At least iCloud and Siri are free (hope they don't start to charge extra for extra Siri services).
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Agree with everything you said except that Siri is free. It's true the s/w is included with the phone at no extra charge but using Siri can cost the user if they are using it via 3G and not WiFi. It will be interesting when the first 4S bills come in and we see how much data Siri requires. Then we will know the real cost of Siri.
 
iChrist said:
.
Wow, people who buy 32gb and especially 64gb are not smart. They pay $100 or $200 more for same phone but extra memory only cost like $10. These peoples not good at math apparently and buy rip off model. Ha. :eek::confused::apple:
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This is coming from someone who is not good at English.
 
Anyone have any clue what the cost of manufacturing would be if it was in the US compared to the $8 in China? Curious if we are talking 2x or like 10x
 
ndpitch said:
No, Apple also has to pay the manufacturers to build it. They have to pay for all the advertising and marketing that's gone into it. They also have to pay for the initial research, development, testing, etc.

There are much more costs involved than just the parts to make it.
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rdowns said:
Uh, no. This is simply the cost of parts. It doesn't include manufacturing costs, patent/royalty costs, marketing, R&D, packaging etc.
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It's not much more for all other aspects.

Stop brushing off the evidence, Apple is ripping a lot of people off, no point in denying it.
 
Invincibilizer said:
It's not much more for all other aspects.

Stop brushing off the evidence, Apple is ripping a lot of people off, no point in denying it.
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Ripping people off is highly subjective. It is dependent upon your personal opinion of what margin is too high for a company to make. Given that Apple is selling Macs and iDevices hand over fist, your opinion is not shared.
 
Invincibilizer said:
It's not much more for all other aspects.

Stop brushing off the evidence, Apple is ripping a lot of people off, no point in denying it.
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How the hell do you jump from me (correctly) replying to a post with ridiculous profits that Apple supposedly makes to talking about being ripped off?
 
claus1225 said:
I think you need to add in software cost. I dont think it's cheap to develop siri.

that's $100 bucks there.
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Siri is based on free open source software whose development the federal government funded. It didn't cost that much at all.

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Invincibilizer said:
It's not much more for all other aspects.

Stop brushing off the evidence, Apple is ripping a lot of people off, no point in denying it.
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People are ripping themselves off. There is a sucker born every minute, and almost every one is an iPhone customer.
 
I didn't read any comments, sorry if that's double...

To measure the BOM cost against the 'retail price with contract' is wrong since that price includes a heave subsidy from the phone provider. You need to compare to the no-contract-sim-free price, which is around $700 or so.

Sounds expensive. But price is seldom calculated from the cost and the market doesn't seem to mind seeing the sales figures....
 
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