iPhone 4 Costs $187.51 To Manufacture

iPhone 4 BOM study

Ever since iPhone 4 was launched, we have seen quite a few tear-down pictures and videos of the latest iDevice.

Now, electronics market research firm, iSuppli, has published results from a tear-down study where the company has looked into the costs incurred by Apple in manufacturing the latest iPhone. iSuppli has revealed that a 16GB iPhone 4 carries a Bill of Materials (BOM) cost of $187.51.

This is not the first time iSuppli has conducted such a study. The company has published their BOM estimates for several popular gadgets including iPhone 3G, iPhone 3GS and iPad in the past. BOM estimates play an important part in studying the impact of a product launch on the company's revenues. Apple has traditionally maintained low component costs on the iPhone which has helped Cupertino enjoy higher profit margins. However, the component costs seem to have marginally risen with iPhone 4. You may note that the BOM estimate for the lower end iPhone 3G and iPhone 3GS were estimated to be $174.33 and $178.96 respectively.

The rise in costs could be attributed to newer features incorporated on iPhone 4. Here is a brief on the major components used.

Retina Display:

The latest iPhone model contains a display screen with 960×480 resolution. Steve Jobs claims the retina display on iPhone 4 to be the best among the current crop of smartphones. The display is believed to be sourced from LG at a per-unit cost of $28.50


In addition to the accelerometer, the iPhone 4 now includes a gyroscope chip to detect 3-dimensional movement even better. This is expected to offer a better gaming experience to users. The gyroscope chips are noted to have been procured from ST Microelectronics at a price of $2.60.

A4 Processor:

As we have noted in the past, the new iPhone is run on Apple's A4 processor chip, which is also used in iPad. This chip has been manufactured by Samsung Electronics and is estimated to have cost $10.75. It is interesting to note that the price is a significant drop from the $17.00 that iSuppli had posted in its iPad teardown analysis. While the cause for the price drop has not been stated, we believe that the higher volumes could be a primary factor.

Camera Module

The latest iPhone comes with a 5-Megapixel camera along with a front-facing VGA module. The improved technology has definitely resulted in a marginal rise in prices. The two cameras have been pegged at $9.75 and $1.00 respectively. For a perspective, the 3-Megapixel camera on iPhone 3GS was estimated to have cost $9.55.

Here is a comprehensive breakdown of the component costs:

iPhone 4 BOM study

Do note that iSuppli's BOM estimates do not include costs rising from labor, shipping, advertising, software development or patent licensing and so the overall costs are expected to be much higher. Nevertheless, the teardown analysis provides an interesting perspective on the estimated profit margins that Apple stands to make from the sale of iPhone 4. What are your thoughts?

[via iSuppli]