AfterDawn: Tech news

iPhone 4 costs under $200 to build

Written by Andre Yoskowitz (Google+) @ 28 Jun 2010 22:32 User comments (17)

iPhone 4 costs under $200 to build iSuppli has torn down the new iPhone 4, and found that the hardware costs as little as $187.51 to build.
The smartphone's most expensive component is the 3.5-inch LCD display, which was created by LG Display and costs $28.50 per device.

"Over the years, the iPhone has generally tended to hover in the $170-to -$180 cost range because Apple seems to be trying to hit some kind of budget," says Kevin Keller of iSuppli.

Keller notes that the tear down does not include R&D, labor, shipping, advertising and iOS development, which could add a significant amount to the total.

The A4 processor was created by Samsung and costs $10.75 per device. The gyroscope chip costs an estimated $2.60 per device and the accelerometer chip costs 65.

It is unclear how much money Apple receives per device from AT&T, which in turn sells the device (with contract) for $199 or $299 depending on the amount of memory, but regardless it seems Apple is making a high profit margin on each device sold.

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17 user comments

128.6.2010 22:47

so another words, the phone is made cheap so they can have an excuse to give chinese a low pay rate. either way, it is all planed, so they can some how kill the chinese population slowly.

228.6.2010 23:25

Originally posted by Hyasuma:
so another words, the phone is made cheap so they can have an excuse to give chinese a low pay rate. either way, it is all planed, so they can some how kill the chinese population slowly.
Meh if they wont put them to work soemone else will and taiwanhas some pretty low running factories....china has not been the best of the worst factory wise for a decade now....

Still even with the 2 or 3 declines since the 90s the manufacturing base in china is better than what it is in the US 0-o

328.6.2010 23:30

We can be reasonably sure that they are giving apple at least $300 per device, as verizon gives at least this much; and verizon didn't offer enough to get the iPhone 4...that means that the 16GB version costs at least $500...probably more.

They make it cheap because they know it only has to last a year; after that, 80% of them will get thrown away in favor of the iPhone 5. iPhone users don't care if the screen has yellow blotches all over it when new, or if the rest of the screen is always looking yellow, forever. They don't care if it is slow, unreliable, or incompatible...if buttons stick, or fail to function entirely, they just say, "I really don't need that...I can adjust the volume from the touchscreen, and even though it is yellow, it is still useable".

429.6.2010 5:07

im not a fan of crapple but u obviously dont have an iphone

529.6.2010 11:20

Originally posted by KillerBug:
We can be reasonably sure that they are giving apple at least $300 per device, as verizon gives at least this much; and verizon didn't offer enough to get the iPhone 4...that means that the 16GB version costs at least $500...probably more.

They make it cheap because they know it only has to last a year; after that, 80% of them will get thrown away in favor of the iPhone 5. iPhone users don't care if the screen has yellow blotches all over it when new, or if the rest of the screen is always looking yellow, forever. They don't care if it is slow, unreliable, or incompatible...if buttons stick, or fail to function entirely, they just say, "I really don't need that...I can adjust the volume from the touchscreen, and even though it is yellow, it is still useable".
I find it interesting that you know how every iPhone user thinks. I don't mean to crap in your fanny-pack but you really shouldn't speak for people you don't know. I know close to 1.7 million people that will disagree with you.
Cheap? You've obviously never used one of the new phones.
Yellow screen? There is a warranty for that if it stays that way.
Slow? Once again, you haven't used the new phone yet have you?
Unreliable? Depends on your location and that's an AT&T problem. I'll never understand why people insist on blaming the iPhone for AT&T issues.
Incompatible? With what? The iPhone is compatible with damm near everything.
I've owned every iPhone and never had button issues.

If one of the other smart phones had to roll out over 1.7 Million Phones in 3 days they would have "yellow blotch" type issues as well. Mistakes are a part of life. That's why we have a warranty. If yours has an issue than apple will give you another one. I have never had a problem with apple's customer service.
There is one issue with the iPhone 4 that is something to honestly bitch about. The antenna issue is seriously annoying and something they need to fix or they will lose at least one customer, myself. The other complaints are personal opinion, jealousy or people that bash Apple for the sake of bashing Apple.

629.6.2010 11:57

And I work for Apple's customer service, and I can say one thing djeazyg, just cause you never had a bad experience, although not in the millions, 10s of thousands have and not all of them get the luxury of having their phone replaced. *thats why apple makes it an issue to sell better/extended warranty packages on everything they sell*.

But I can agree with you on a couple of things you commented on. The antenna is horrible, and requiring a case to solve the issue Apple did this on purpose because they wanted even more profit margin on their accessories. Sadly its an issue they will never fix, because it makes them millions if not billions more on accessories alone.

Second, I agree most people haven't even used the iphone. I work for apple and I don't even own one, but I don't bash it either. I tried it, I liked it, but I don't like restrictions of having a contract to use it. *I do support from Canada and here its mandatory to have 3y instead of 2.* However, thankfully apple has been selling them to us without contract so soon I will be purchasing one because people who bash it obviously haven't tried it. It may as well be a PC hand-held device. Its far from slow, its compatible with most things, and the things that aren't can be jerry rigged or hacked eventually.

Still I do think they over price these devices, but I can't say once you buy it you won't appreciate the value, because as you get used to it, you will. That's coming from someone who doesn't own one. I guess you could say I been waiting for Iphone 4.

729.6.2010 13:38

About an hour after I posted that comment my "bumper" came in the mail. Neat how it conveniently fixes that antenna issue and I think you might be right about it staying that way so apple can sell cases. Sad but probably true.
I don't like being tied to a contract either but AT&T has really upgraded it's service in my area and I don't have a problem anymore. It used to be horrible so I can sympathize with those that have issues but for me all is ok now. It's still not the iPhones problem.
I have yet to find anything other than older hardware that the iPhone is not compatible with. Maybe I'm just lucky that way.
As for the customer service...... I'm sure you have a lot of people that try to get a new phone for stupid stuff. Maybe they have one dead pixel and want a new phone for it or the reception is bad where they live and blame the phone for it. Not to mention the people that hack or Jailbreak the phone and then want Apple to replace it when something goes wrong. I can imagine those people are not happy but there issue is also ridiculous. I jailbreak my iPhone as well but if I screw it up I cant expect Apple to replace the phone for my mistake. You need to be careful. I have found that if you have legitimate problem with the phone they don't give a hard time about it. But again, maybe I'm just lucky.

829.6.2010 14:39

Well I wouldn't go so far to say lucky; I just saying their can be some real asshole reps on the phone that will look for any reason to not replace the phones, even if its not the reps fault. After all for every phone that gets replaced it hurts Apples bottom line. And nothing gets Apple madder than taking money from their bottom line. Safe to say I've seen managers to some crazy ass shit, tho that's stuff unrelated to this article, nor anything I should talk about online.

As for phone service, yea it's usually down to the carrier if your phone doesn't work properly in a certain zone or whatever. But when people call say AT&T they get the asshole rep that tells them its Apple's fault, then you get the rep from Apple pointing fingers at AT&T and other carriers. It's called "fluffing" the client. And it shouldn't be done, but it gets done. However, when you underpay your staff, treat them like crap when you do work hard for what little you earn, I can honestly can't blame customer service from being on the shit side; and frankly neither should anyone else.

929.6.2010 15:11

"but regardless it seems Apple is making a high profit margin on each device sold."

No doubt...yet the clueless fanboys stand on-line in the thousands for any piece of crap with an Apple on it...ROFL!!!

1029.6.2010 15:24

Originally posted by Mysttic:
And I work for Apple's customer service, and I can say one thing...
Errr...Doesn't every tech company forbid employees from commenting on the web unless they are part of the special web group? Gateway was big on that when it was worth a crap....lol

not that I will tell or care...lol

1129.6.2010 17:19

Okay but do you know my real name? Can the company relate these comments to me in anyway? Considering I didn't write this at work, but from home on a secured network; I pretty sure it would be illegal if Apple spied on me from home.

1229.6.2010 21:01

Originally posted by dEwMe:
"but regardless it seems Apple is making a high profit margin on each device sold."

No doubt...yet the clueless fanboys stand on-line in the thousands for any piece of crap with an Apple on it...ROFL!!!

Another example of what I'm talking about. Speaking for people they don't know and bashing Apple just for the sake of bashing Apple. Pointless and stupid.

1330.6.2010 4:13

"I find it interesting that you know how every iPhone user thinks. I don't mean to crap in your fanny-pack but you really shouldn't speak for people you don't know. I know close to 1.7 million people that will disagree with you.
Cheap? You've obviously never used one of the new phones.
Yellow screen? There is a warranty for that if it stays that way.
Slow? Once again, you haven't used the new phone yet have you?
Unreliable? Depends on your location and that's an AT&T problem. I'll never understand why people insist on blaming the iPhone for AT&T issues.
Incompatible? With what? The iPhone is compatible with damm near everything.
I've owned every iPhone and never had button issues. "

Cheap - it only costs $200 to build; it may be very overpriced, but that does not change the fact that it is cheaply made.
Yellow Screen - Apple has no fix for this, and will not replace it under warranty. They might be willing to fix the splotches, but the iPhone has had a yellowed screen since the 3GS, and apple will do nothing about it.
Slow - compaired to android phones selling for the same price, it is a sloth.
Unreliable - when half of them come with yellow splotches, about 1/4 of them have broken buttons, and the antenna does not work with left handed people...yes, it is clearly unreliable.
Incompatible - Does it work with flash now? How about in a week, or a month, or a year? No...didn't think so.

AT&T has a lot of problems...but when the phone goes from 4 bars to no signal just because I picked it up, that is Apple's fault! Clearly, it is not AT&T's fault when the volume down button does not work. Maybe they are to blame for the yellow screen? Even when an issue can clearly be pinned on AT&T, you have to remember that Apple restricts their devices to AT&T...so a flaw with AT&T is a flaw with every Apple mobile device (jailbroken devices ignored). No one would ever blame Google for a problem with the AT&T network...as Android is on every network.

I did try the iphone 4; one of my friends got it on launch day, and promptly brought it to me to try to fix the screen and the volume key. We were able to fix the volume key easy enough using a safety pin, and the yellow splotches are almost completely gone on their own now...but the screen is still yellowed, and it appears that apple calls this a feature; and thus will not fix it! It is clearly faster than the 3GS, but the internet still crawls...not that you can use most of the internet without flash. He would have returned it for another one, but that isn't possible! They sold all the iPhone4's that they had, and about half of them had the splotches, and all of them have the overall yellowness. He would just plain return it, but he is locked into another 2 years on a AT&T contract now! I can't say if it is faster than my droid; the only thing that slows down my droid is flash videos...

That "bumper" is total BS. No matter how I hold my droid, it works fine. Antenna position might hurt you by 1 bar under some situations, but if you can completely kill a 4-bar signal using your hand, then it isn't just the location of the antenna.

I don't know all the apple users; and I know that some of the people that bought a iPhone4 are app developers, reviewers, etc...so not ALL the customers are mindless sheep that worship Steve Jobs. However, most of the users will follow whatever insane spin Steve Jobs tries to put on things. Steve up'd a video of how to "Correctly hold the iphone4"...now apple users are thanking Apple for making a phone that has forced them to learn the correct way to hold it (in an uncomfortable position, held by a couple fingers). Steve says flash is crap and now apple fans are all saying they don't need flash...and instead they curse the 95% of all video on the web for not being compatible with a phone designed to be incompatible. Steve blocks free apps so that you have to pay money for inferior versions of the same apps, and apple fans thank Apple for saving them from the extra features!

141.7.2010 10:59

Good for them. Any company should be at least making 50% markup or why be in business at all? Materials may be $200, but you still have employees to pay, time, R&D, etc... you have to make money.

151.7.2010 11:10

Originally posted by Kupotek:
Good for them. Any company should be at least making 50% markup or why be in business at all? Materials may be $200, but you still have employees to pay, time, R&D, etc... you have to make money.
Obviously these people don't own a business and have no clue about what they are talking about.

161.7.2010 16:35

lots of android and blackberry fan boys in here
I will assume you have not bad your hands on a iPhone and that is why you choose to bash, yes the 4g seems sketchy...

the 3G was one of the best phones made, and still is today
I would like to see some1 release something that stands up to it, but they just dont... and the hacks avalable... wow... it is also a coders dream.

you continue to use your calculators (blackberry) and be smug to the rest of the world, your no better then the macbook guys...

im a pc user, always have been, i been a tech for a living for the last ten years... apple systems suck but one thing you should know is they do know how to create a OS

and that seems to be what makes you or breaks you in the cell world these days

and as far as it costing 200$... are you suprised?
the motherboard is made by foxconn (yes the same crooks that made the x360 mobo)

overall the iphone still beats android (yeah say what you want, I have a LG w/ android.. its dope... but not as good)

windows 7 mobile is the only thing close to raining on it parade, and its just not there yet

you also have to remember the iphone has been out for I belive 3 years now (Ive had my 3g for about 2 and my 3gs for 1)

everybody looks at the thing and thinks its super cheap (I did too)

however I have rocked it without a case for about 2 years (do have a gela skin on the back tho) and the screen doesnt have any scratches... like all my other phones 1 year in and there ratched..

my current one ive droped this phone in a puddle half a foot deep twice (while on both times, once in a call), I droped it in a bunch of mud and washed it off (turned it off when i washed it off lol) and it works fine, speaker is as good as the day i bought it, my older one got it even worse, it was also droped in a full pint of beer and is still rocking today (brother is using it)

I will admit the phone is slow, and it needs to be rebooted every so often (i have so many hacks going on there who knows if its me or the OS)

OVERALL SHOW ME A BETTER PHONE, Im all eyes & ears

171.7.2010 19:30

large popular company makes huge profit margin's on product.

didn't need the run down to guess this was the case

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