iPhone 5 Manufacturing Cost Estimated To Exceed $207

iPhone 5 Estimated To Cost Upward Of $207 To Manufacture

Today, iSuppli released a new report that details estimated costs for the primary iPhone 5 components. To complete this parts teardown, iSuppli has taken into account not only information released by Apple themselves, but also general industry knowledge to complete an accurate cost assessment of the new device.

While the estimate omits other various costs involved in the development, creation, production, marketing and distribution of the iPhone 5, it suggests the entry-level 16GB model costs approximately $199 and an extra $8 to manufacture.

The new iPhone 5 carries a bill of materials (BOM) of $199.00 for the low-end model with 16Gbytes of NAND flash memory, according to a preliminary virtual teardown conducted by the IHS iSuppli Teardown Analysis Service. When the $8.00 manufacturing cost is added in, the cost to produce the iPhone 5 rises to $207.00. For the 32Gbyte version of the iPhone 5, the BOM cost increases to $209.00, while 64Gbyte version is estimated at $230.00, as presented in the table below.

While the overall estimated cost of materials (BOM) is more expensive for the iPhone 5 than for the iPhone 4S (speculated to cost $188 in parts when the device launched), Apple’s real profit comes from selling higher capacity models. Last year, the 32GB and 64GB iPhone 4S variants cost Apple $207 and $245 – respectively – per unit. However, this year, it seems as if the price of flash memory has dropped significantly, as the 64GB iPhone 5 is estimated to cost Apple $230 in parts.

Moreover, with high premiums and contract royalties that allow carriers to offer iPhone models at a subsidized price, Apple’s profit margins remain nearly unchanged. After taking into account a higher manufacturing cost for the entry-model and a lower manufacturing cost for the higher-end model, the average overall cost remains consistent with that of the iPhone 4S’.

Stay tuned for complete coverage on both Apple and their new iPhone 5.

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