Apple’s 16GB iPhone 5 carries a bill of materials (BOM) of $199, according to a preliminary virtual teardown from IHS iSuppli. The overall cost rises to $207 once the cost of manufacturing is added which excludes other expenses like software, licensing and royalties that Apple might have to pay for each handset.
The 32GB iPhone 5 cost $217 to manufacture while the 64GB unit has a total BOM + manufacturing cost of $238. The BOM for last year’s iPhone 4S was estimated to be just $188, or $11 cheaper than the latest revision. Apple’s new display technology and the LTE radio are responsible for the added cost this time around.
The single most expensive component in the iPhone 5 is the display / touchscreen at $44 each. Wireless components for each phone cost $34 while the mechanical / electro-mechanical components drove cost up $33 per handset. Apple’s custom A6 processor is more expensive than last year’s A5 as well - $2.50 more per chip.
At first glance this might seem like bad news for Apple since one can purchase the same handset for just $199 through a number of wireless carriers. But, it’s important to remember that is the subsidized price – the carrier is paying Apple full price (or perhaps a slight discount) and they are earning back their investment through that two year contract you signed.
We’re expecting a more accurate analysis of the components and BOM from iSuppli and iFixit later this week when the phone hits the streets.