Apple’s newly released iPhone 5 is estimated to cost the Cupertino company more than any of its predecessors, reports CNET. According to an estimate from research firm UBM TechInsights, Apple could be spending $167.50 to make each entry-level 16GB iPhone 5, which the company is offering at $199 on a two year contract.
The research firm has broken down the potential cost of each of the various components, according to which, the taller 4″ display of the iPhone 5 costs $18, the touch panel costs $7.50, and the battery costs $3 to build. Meanwhile, the faster A6 processor cost $28, the iSight camera costs $10 and the built-in WiFi/Bluetooth/GPS chip is around $4. Adding it all up along with several other components, the total comes out to be $167.50.
In comparison, the 16GB iPhone 4S costs Apple $132.50 to build, according to TechInsights’ estimates, while the 16GB iPhone 4 has a price tag of only $112. Except for the battery and the NAND flash storage, every component costs more for the iPhone 5 than for the previous two models.
The BOM for the iPhone 5 is based on very preliminary estimates since the device has yet to be taken apart and analyzed internally.
TechInsights will publish a more accurate estimate once it opens up the new iPhone and check out its insides in detail when the device ships on September 21.
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Apple is not offering them at the lower rate. Its the carriers that pay the difference and then make 100% profit on the difference as well with the bloated plan pricing they force you into. Apple is making its money upfront.
Does the $167.50 figure include labor costs?
I’d presume revenue generated from each 2-year-contract iPhone is more than $199.