A $849 64GB iPhone 5s only costs Apple $218 to build

A $849 64GB iPhone 5s only costs Apple $218 to build

Summary: Also, Apple charges customers $200 for a storage bump from 16GB to 64GB when the actual cost of the extra storage is $20.

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TOPICS: Mobility, Apple, iPhone
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The iPhone is a flagship handset, and as such it commands a flagship price. But one other thing that's flagship about the new iPhone 5s is the margin it pulls in for Apple.

According to a teardown analysis carried out analysts at IHS, a top-of-the-line 64GB iPhone 5s, which retails unlocked for $849, costs Apple a mere $218 to build, a price that includes the manufacturing costs.

The build price difference between this and the 16GB iPhone 5s is less than $20, and yet Apple charges consumers a whopping $200 for the extra 48GB of storage.

The single most expensive component inside the new iPhone 5s is the display assembly, which costs an estimated $41, while the wireless assembly costs an additional $32.

The sensors, which includes the gyros, compass, accelerometer and fingerprint reader only costs Apple $15, according to IHS, while the A7 and M7 processors are another $19.

iPhone 5s bill of materials
(Source: IHS)

A separate teardown analysis also shows that there's very little difference between the iPhone 5s and the plastic-backed iPhone 5c, and that includes the massive margin.

A 16GB iPhone 5c, which has a price tag of $549, costs Apple $173.45 to make. And, as you might suspect, given that there's only $25 between a 16GB iPhone 5s and an iPhone 5c with similar capacity, the components aren't much cheaper. The screen costs the same, as does the flash storage and the wireless assembly.

The A6 processor is only $6 cheaper than the 64-bit A7 and M7 motion coprocessor combined, and the battery is only $0.15 cheaper.

iPhone 5c bill of materials
(Source: IHS)

At their core, apart from the A7/M7 chips and the fingerprint reader, there's little to separate the two devices. 

Topics: Mobility, Apple, iPhone

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116 comments
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  • And the Lemmings can't get enough of them.

    Another P.T. Barnum product.
    IT_Fella
    • Apple is..

      ... great and marketing and knows what to deliver to its target. Microsoft is so behind and terrible and marketing - and that is why you see this massive difference.
      Wonder.man
      • Or just maybe

        Windows customers are more knowledgeable consumers. I can't blame Apple though for gouging as much as they can though.
        hmmm,
      • Maybe, but this latest offering could be considered a bit hypocritical.

        After all, it's no more than a re-incarnation of the "I am rich" app. The difference being it comes as a handset. So, Apple forbade that app but rolled the concept into this new product. It's a very nice instrument but hardly worth the expense unless there's a need for that much performance and a set of software tools to do the work. Will there really be an $800 value in watching movies and posting to facebook?
        opcom
      • No complaints here about marketing.

        Who cares if M$ sells its o/s for only $150 whatever. I don't want them jacking up the price. The humorous topic today is Apple's markup. For sure Apple's fine products are not the only ones with big margins. Look at the 'durable laptop' industry. The biggest money difference is a water resistant membrane built into the keyboard ($5 more) and a real metal casing ($20) and suddenly the $700 laptop is $2500. if the few highest incremental feature options vs. retail price for various top end goods were plotted, it would be a hyperbolic curve approaching the amusing hyperbole in all the posts on this topic.
        opcom
      • You sound dumb

        Somebody said Apple I ripping you off by 400% and you're talking about Microsoft?!
        jonnybr
      • And the Lemmings can't get enough of them

        20 million Lemmings can't be wrong !!
        Oldmanpmc-d0f8a
      • Ok....

        Go back and drink your Apple flavored Koolaid. Just love how you put the blame on another company. Face iut. You can't handle criticism of you beloved Apple. Wait until lawsuits fly over the drop of Apple stock price.
        Gisabun
    • Less of Lemmings comparing to Samsung buyers, which buy bendy plastic ...

      ... junk for as much with the same premiums for bigger flash memory.

      Apple at least has high build quality. Even iPhone 5C is much sturdier than SGS4/SGN3 as it has proper internal metal structure.
      DDERSSS
      • I feel the need to point out that lemmings are followers

        And Samsung doesn't put out products that are trendy as hard as they try to. Talk as much crap as you want about them, but at least use a valid complaint.
        blarelli
        • I feel the need to point out that lemmings are followers

          I feel the need to point out that lemmings are gullible followers very much like religion.
          Oldmanpmc-d0f8a
      • Re: bendy plastic ... ... junk

        *Cough* Iphone 5C *cough*
        ldo17
    • Apple gouging

      I was a lemming, but no more. Even their peripherals and accessories are way over priced. They will not be adding my 2 cents to their bottom line anymore.
      kodiak2012
    • real life build quality for lemmings

      I personally know two people one with an iPhone and one with a note 2. The note two survived a 60 mph head on collision (Honda motor cycle v vs golf) in my sons pocket. He nearly died the note 2 was unscathed. My nieces husband sat down with an iPhone in his pocket and broke the screen... Hmmmm
      trojanere
    • And it costs Samsung even less.

      16gb iPhone 5S, $699
      16gb Galaxy S4, $749, and thats with Samsung not paying a middleman like Apple does for parts because Samsung makes their own parts, But hey, Its Android, free and open, allowed to charge what ever they want and the, but the minions don't care.
      cheydaddy
  • Similar costs for other devices, such as the Galaxy S4

    Good for Apple, Samsung, and any other other manufacturer. People are willing to pay. Also, people tend to forget that there are also other costs associated with products, such as engineering, customer support, retail space, etc. It takes more than just the cost of production to turn a profit.
    unknownpart
    • Correct

      Just imagine now if Apple didn't spend billions on marketing 2 products (iPhone/iPad). Apple would have significantly higher margins, but I don't really think the demand would last. Also, R&D costs aren't as bad as it could be for Apple given they use virtually the same case for two generations in a row.
      ikissfutebol
      • R&D Costs

        You are joking right ikissfutebol? Because Apple may use a similar case the costs for R&D aren't as high? The real cost of R&D goes into the RF design, squeezing in as efficient a baseband power supply and the development of a protocol software for the wireless technologies incorporated into the phone. Case design? Really.....
        Android already has a baseline protocol software and API that Samsung and other vendors can incorporate into their phones. Apple develops their own, as does Microsoft.
        krustykanuck
      • Apples R&D consists of...

        scouring for existing technologies somebody else invented and either reverse engineering it or stealing it, changing a little and getting a patent.
        "We have been Shameless about Stealing Great ideas" S. Jobs.
        xuniL_z
    • Extra storage

      That's all well & good but doesn't really justify charging $200 for 20$. I dont know how many people buy a 64..most I know have 16 for cost. Its frustrating which is why so many android users crave cheap SD cards (& are worrying that more devices like Nexus are dropping them).. Everyone says it doesn't matter cuz of the cloud buy that requires a data connection & most people still dont have unlimited data. I still use an iPod classic because I want tohhave all my music available.
      MatRod6