iPhone 5 costs $168 in parts to make!

[Big.Mac.Daddy]

http://www.idownloadblog.com/2012/09/14/16gb-iphone-b-bom-168-ubm-techinsights/

Bill of materials for the entry-level 16GB iPhone 5 has been estimated at just $167.50, according to an analysis published Friday by UBM TechInsights. In comparison, UBM TechInsights estimated that the 16GB iPhone 4S has a bill of materials of $132 ($112 for the iPhone 4).

The $36 difference between the iPhone 5 and its predecessor covers new technologies Apple built in, including the larger four-inch Retina screen that leverages the*in-cell assembly process, the speedier A6 chip, some new sensors and mics and 4G LTE modem from Qualcomm, to name a few…

That is some serious chedda' being made off each iPhone 5

 

[dndandrea]

You didn't factor in research and development. There's not a HUGE gap of profit being made as it is portrayed in thi quote of yours.

 

[xAnthony]

Yeah, because research and development, and all the months put into perfecting the design costs nothing...

 

[Eddyisgreat]

R&D, SHIPPING AND MARKETING R FREE FOLKS.

Every time.

 

[TG1]

Someone needs to add in the cost of labor for assembly/production.

 

[Type121]

A hell of a lot more goes into the true cost to sell an iPhone than simply the sum total of the parts cost.

 

[Big.Mac.Daddy]

You didn't factor in research and development. There's not a HUGE gap of profit being made as it is portrayed in thi quote of yours.

Yeah, because research and development, and all the months put into perfecting the design costs nothing...

R&D, SHIPPING AND MARKETING R FREE FOLKS.

Every time.

And does that take into account labor for assembly/production ?

A hell of a lot more goes into the true cost to sell an iPhone than simply the sum total of the parts cost.

The title of the thread says "The iPhone 5 costs $168... IN PARTS... to make"

 

[BLUElightCory]

I doubt it's very different for any smartphone on the market.

 

[xAnthony]

The title of the thread says "The iPhone 5 costs $168... IN PARTS... to make"

And the bottom of your posts says "That is some serious chedda' being made off each iPhone 5"

 

[lockerc18]

And the human body is worth about $4.50, from the price of the chemicals in it.

Now, about the R&D costs for THAT...

 

[Oakmhcky21]

Add is labor cost, as well as the equipment and what not to actually make the parts, and shipping to the us.

 

[magpie maniac]

That is some serious chedda' being made off each iPhone 5

Someone wasn't paying attention during microeconomics class.

 

[dukebound85]

The title of the thread says "The iPhone 5 costs $168... IN PARTS... to make"

Yet, you post this...

That is some serious chedda' being made off each iPhone 5

So no, not some "serious chedda" being made when you factor in all the costs to make the phone....you know like R&D, manufacturing, advertising, patent licensing, logistics, labor, etc

 

[steph280]

I'd bet if you were to buy the parts yourself and try to build one from scratch (if it's even possible), it will cost you way more.

 

[Cougarcat]

A hell of a lot more goes into the true cost to sell an iPhone than simply the sum total of the parts cost.

While true, You can bet that the iPhone has one of the largest profit margins of any Apple product. Just look at the massive difference in cost between the iPod touch and the unsubsidized iPhone.

 

[nostresshere]

These sort of posts make me want to reach out and smack somebody.

It does not matter if it costs $.99 to make it. Nor does it matter about marketings, shipping, packing, advertising, development, insurance, building overhead, etc etc etc

They can sell it at whatever freakin cost they can get. Simple stuff.

 

[Dwalls90]

http://www.idownloadblog.com/2012/09/14/16gb-iphone-b-bom-168-ubm-techinsights/


Image

That is some serious chedda' being made off each iPhone 5

No freaking way.

Way more reputable sources pointed at the 4 and 4S being a little under $200 each. The 5 is also probably around that ballpark.

Apple turns a final margin of about 30% on iPhones. There is no way they are pulling a margin of 85% on manufacturing alone.

 

[dccorona]

Someone needs to add in the cost of labor for assembly/production.

forget the cost of labor. That glass matching machine they use can't be cheap

 

[davefromca]

Wow 170 in parts alone is actually quite a bit invested.

 

[onthecouchagain]

Apple makes anywhere from 49-58% profit from a single iPhone.

Chew on it.

 

[Geckotek]

It'll be interesting to see if iSuppli comes up with the same number.

 

[trouble747]

This just in: Business sells product for profit

 

[ThatsMeRight]

You didn't factor in research and development. There's not a HUGE gap of profit being made as it is portrayed in thi quote of yours.

Yep. But the profit margin is still huge, though: between 40 and 50%.

 

[Geckotek]

Margins have been increasing year on year according to financials - suppliers have been squeezed very aggressively.

That's odd, because the BOM has been floating between $180-$190 since the 3G.

 

[thadoggfather]

Interesting, $188 is what 4S was at launch as I remember:

http://news.cnet.com/8301-13506_3-20123112-17/iphone-4s-parts-cost-$188-study-finds/

Obviously, it's in the $130's for 4S now, because of economies-of-scale.

Don't forget R&D, time, yadda yadda....

$168/188 isn't the bottom line with overhead.

Still, that $20 decrease in cost, with LTE, A6, and 4" also not taking into account mild deflation from 2011 to 2012, that's a hell of a feat.

Also, you might not want to look at the increments in cost (for 4S) between storage:

$19.20
$38.40
$76.80

for 16-32-64 respectively. It's probably even narrower and less now with the iPhone 5.

But that's no surprise that you're paying a premium for little increase in cost because storage needs.

I had a 4S 32GB, preordered a 5 32GB this time as well. "Didn't like" forking over the extra $100, but I had a full upgrade so I used it (while keeping unlimited on at&t, woot).

depending on how you frame things, all capacities have their downfalls.

$400 vs $850 is like % off total with subsidy than $300 vs $750 even though they both effectively discount it $450.