iPhone parts cost $200, says analyst

Stephen Withers
Tuesday, 03 July 2007 03:37

Your IT - Mobility

A teardown analysis of the iPhone has estimated a total materials cost of $US200 for the 4G version and $US220 for the 8G.

While Portelligent's analysis is only available to paying customers, BusinessWeek reports some of the details.

The touchscreen is believed to be the most expensive component - an "educated guess" puts the cost at $US60 - and at least two of the chips used are based on ARM's CPU technology (Apple was one of the original owners of UK-based ARM).

The $US200 does not include assembly costs, packaging and so on, and therefore this doesn't mean Apple is making a clear profit of $300 or $400 on each iPhone. But a healthy margin - and materials costs of around 50 percent isn't unusual for non-commodity electronic products - allows Apple to recover the investment needed to create the iPhone in the first place.

And remember that retailers expect a margin too - it may be Apple and AT&T selling the iPhone to consumers, but their retail operations still need to pay their way.