iSuppli Says iPhone 4 Cost Apple $187.51

By  |  Monday, June 28, 2010 at 9:57 am

Apple is making a decent profit on the iPhone 4 after the fees AT&T likely pays for each sale of the iPhone 4 ar added on, the most recent teardown by research firm iSuppli indicates. Each device costs about $187.51 to produce, with the new “retina display” being the most expensive component. iSuppli believes it to be manufactured by LG at a cost about $28.50 per unit.

Researcher Kevin Keller told BusinessWeek that Apple has seemed to generally spend about $170 to $180 to produce iPhones, from the original model in 2007 to today’s iPhone 4.

The iPhone 3Gs initially cost about $179 to produce, although that price has since dropped to about $134. That means Apple likely now only breaks even or makes a very small profit as it sells for $99 from AT&T.

Inside, iSuppli found that the device uses a similar A4 chip that is also seen in the iPad, and confirmed the antenna is in the metal strip around the phone. As you’ve seen here on Technologizer, that’s been a potential problem for Apple, although iSuppli makes no reference of it in its report.



9 Comments For This Post

  1. Bouke Timbermont Says:

    Why can't I just buy an iPhone for like 450$ without a SIM-lock or contract straight from Apple. Srsly: WHY? Why is the global phonemarket so rotten???

  2. Paul Judd Says:

    A note as usual: iSuppli costs only factor in components and do not factor in other expenses that are involved such as software, research and development, distribution, and patent royalty costs. They also do not factor in subsidies received. This is just components and nothing else.

  3. Bouke Timbermont Says:

    Why oh why can't I just buy an iPhone4 straight from Apple without a simlock or contract for like $450???

    Providers really screwed up the whole phonemarket…

  4. Hamranhansenhansen Says:

    Because they cost $599 and $699. You can buy them unlocked, but that's such a small market in the US that the going rate is $750 and $850, and right now there probably won't be stock, although of course there are plenty of used iPhones which have been carrier unlocked.

  5. Ed Oswald Says:

    Its due to the fact that Apple cannot control the experience (i.e. Visual voicemail, etc). I can see why but at the same time I think its time to allow the user to choose their carrier here in the US…

  6. Bouke Timbermont Says:

    aha, that explains a bit… But as you say: I really think people should have a choice over which provider and dataplan they choose. Sure, subsidised phones are fun and cheaper if you're getting the bundled plan anyway, but atm you only have a few plans from only one provider so most iPhone users don't have a plan that's right for them and thus are paying too much.

    Subsidized phones are something from the days phones actually cost a fortune. iSupply now proves those days are over: the iPhone4 is one of the most advanced, and thus most expensive phones on the planet, and it's less than 200$! I really think Apple would have A LOT more customers and thus have an immensely greater revenue if they just sold the iPhone4 commitment-free at a $450-ish price. And it would cure the phonemarket.

    The only reason I can think of for Apple not doing this, and so starting a real revolution in the phone business (especially in the US were subsidized phones are much more common than in the rest of the world), is that AT&T is giving them A LOT of money. More than they actually deserve for making the device (like a share of the contracts: why does Apple get money for a service AT&T provides?). That's a high price for AT&T, but apparently a price they are willing to pay to keep the phonemarket in a deathgrip.

  7. Hamranhansenhansen Says:

    People do have a choice of what provider to use. You can pop the SIM out of an iPhone and put in another SIM from any GSM provider. However, in the US there is only one (1) GSM standard network, which is AT&T. Verizon is a closed network that runs only Verizon-brand phones with Verizon hardware. Sprint is a closed network that runs only Sprint-brand phones with Sprint hardware. T-Mobile US uses a non-standard 3G frequency.

    The US mobile market is set up as 4 overlapping monopolies that can't run each other's phones. The people who are least to blame for this are Nokia and Apple, who only make GSM standard phones. The whole idea with GSM is you buy the phone you like, then choose a carrier you like, and the carrier gives you a SIM to put in your phone. But if there is only 1 GSM carrier in your country the system is essentially broken.

    In 4G, apparently Verizon will also have SIM's and iPhones will work on there as well as AT&T.

  8. Bouke Timbermont Says:

    very interesting, I didn't know that. So the US market is even more rotten than I thought :s
    The move to standard 4G of Verizon does give some hope though, at least manufacturers release unlocked phones (without limitation of carriers in the software that is).

    btw: Is it possible to pick any AT&T plan you like with the iPhone?

  9. Hamranhansenhansen Says:

    These iSuppli numbers are ridiculous. The bag of parts is less than half the cost. There is design, engineering, assembly, packaging, software, support, marketing, warranty, legal, retail, licensing of GSM and H.264 and so on, and many more costs. The software alone costs more than $180. Facetime was 18 months in the making just by itself. You don't buy and iPhone for the bag of parts.

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