How much does the iPhone really cost? $220!

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Portelligent estimates that the new smartphone costs Apple a mere $220 to make. Read on the figure out how. Apple has divulged very little about its supply-chain and manufacturing arrangements. The only visible details are Intel the chipmaker, NVIDA and ATI, which supply the graphics chips for computers. So Austin-based Portelligent, which is a teardown firm, breaks the code to discover who supplies all the parts but what it costs to make a device. Here the CEO David Carey takes apart the iPhone. Apparently the cost of the materials used in the iPhone adds up to about $200 for the 4-gigabyte version (it sells for $499) and about $220 for the 8-gigabyte version (it sells for $599). This estimate doesn't include costs of final assembly. The most expensive component on the phone is the touch screen, for which Apple sourced German company Balda. The touch screen costs around $60 per unit.


Samsung has supplied the main microprocessor chip. The serial number stamped with Apple Logo matches closely with the chip that Samsung sells. Samsung also supplied the NAND-type flash memory that stores data on the phone, including songs, video, and pictures.
Source
Image via Anandtech

July 3, 2007 - 5:29 AM | Related Entries - Other Stuff | Comments ()


Reader Comments

  1. David Fox on "

    If you really believe the iPhone costs $220 to make, you should try making one yourself.

  1. Savantster on "

    And this is why the price will drop to $300 over the next year.. they are simply sucking up the market that "has to have it, and now!".. then it will come down in price and more and more people will buy it.

    I don't think you can fault a company for trying to maximize profits in this kind of context... I have NO problem with a company gouging on frivilous toys like this.. the problem comes in when we're being gouged for gas/food/shelter/utilities, etc. Making massive profits on someone's misery is a bad thing, to my reasoning.. making a lot of money on their vanity and greed, that's a good thing (also helps keep the middle of the road humble by realizing they don't "need" such baubles to have personal value ;)

  1. bonze on "

    The most expensive components are the OS and the applications. There have to be extensive development and software costs for this device. The good news is that eventually the price should drop as these initial costs are paid for. Also, the iPhones already sold will continually get better as the software will be constantly improved.

  1. Cosby Lindquist on "

    Take $220 order the parts and make an i phone, the product is more than the sum of its parts. Manufacturing ,R@D ,advertising ,paying Steve Jobs ,benefits ,healthcare ,and on and on and on.

  1. Mike H. on "

    *YAWN* -- this amount of markup seems in line with just about every other manufactured product sold in the U.S. How much does your car REALLY cost the manufacturer? Or your television? Or your computer?

    So, this article is basically a big deal because Apple is doing the same thing every other manufacturer does? Or, what -- should we expect Apple to make less profit than IBM or Nokia or Samsung on their products?

    Why not compare the manufacturing cost versus retail price of the iPhone and other cell phones, PDAs, and computers? Then the article might be a bit more informative. Of course, then it might become clear that Apple is not doing anything unusual...

  1. tom on "

    isn't +50% profit margin a bit excessive? Sure the dream is to get what you can but I thought Apple was about the "people"? I guess they are insofar that apple will take as much money as you'll give them....It's NOT all that people, you're suckers for coughing up so much money, at the end of the day, Jobs could give a crap about you...believe it -I work here

  1. Georgia Boy on "

    Well, use your degree from DeVry and build it yourself. Don't forget to add the Mac OS, but you already know how to write THAT too.

  1. Damien on "

    Honestly, you people are suckers to Apple, do you think Apple, or any other large company, really care about their customers? or do they care about the final buck they make? Think about it, with a business brain. P.S, the OS on it isn't so damn super, think about how many other phone makers are out there, it only takes Apple to release the same product and it has praise, look at the LG Prada, it recieved design awards before the iPhone was even talked about.

  1. kiersten on "

    if you are going to buy the iPhone you are really stupid why buy a phone that cost $150,000 and in five years it is going to cost at less $1,500 and they are going to make a better iPhone so why buy it now get i a live:-) so tell me if iam wrong dont be a pussy

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