A teardown of the Apple iPhone by a research firm reveals that Apple stands to generate a 55pc profit margin on each 8GB device sold for US$599.
The teardown by value chain research provider iSuppli has found that when you count in chips and other electronics consumed and manufacturing costs, the device costs Apple US$265.83 to make.
The bill of materials includes new partners for Apple such as Infineon, National Semiconductor and Balda.
“iSuppli’s teardown, conducted this weekend, determined that the 8GB version of the iPhone has a total hardware bill of materials and manufacturing cost of US$265.83, generating a margin in excess of 55pc on each 8GB iPhone sold at the US$599 retail price,” said Andrew Rassweiler, principal analyst for iSuppli.
Breaking down some of the key components in the devices, much of the core communications ability of the iPhone was provided by German semiconductor maker Infineon, which contributed the digital baseband, radio-frequency transceiver and power management.
Altogether, Infineon’s silicon content accounted for US$15.25 worth of the iPhone’s bill of materials, or 6.1pc of the 8GB version’s total cost.
The chip connecting the display to the graphic controller for the iPhone was provided by National Semiconductor, the display was provided by Epson and the touchscreen technology was provided by Balda of Germany in conjunction with Chinese partner TPK Holding.
Perhaps the biggest winner among the component suppliers for the iPhone was Samsung. The South Korean electronics giant supplies the iPhone applications processor, which includes an ARM RISC core. The processor costs US$14.25 in both versions of the iPhone.
The company also contributed the NAND flash memory and DRAM for the iPhone. In the 4GB version, Samsung has US$24 worth of NAND flash and US$48 in the 8GB version. For both versions, Samsung supplies 1GB of Double Data Rate SDRAM worth US$14.
Samsung has US$76.25 worth of semiconductor content in the 8GB version of the iPhone, giving the company a 30.5pc share of the product’s hardware cost – the largest total of any single supplier.
Sales of the iPhone have kicked off with a bang, and iSuppli believes that this strong performance will continue. Shipments of iPhones are expected to amount to 4.5 million units this year, and will expand by a factor of nearly seven to reach more than 30 million by 2011, according to Tina Teng, analyst, wireless communications, for iSuppli.
By John Kennedy