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IPhone 4 costs $188 to make
- duskwuff 16y agoKeep in mind that iSuppli's reports have been described (by daringfireball, as well as others: http://daringfireball.net/2007/07/isuppli http://daringfireball.net/2007/07/isuppli) as "bullshit". A lot of their price numbers (especially the ones for unusual parts, like the CPU and LCD in the iPhone 4) are pretty much pulled out of thin air.
- jonknee 16y agoDoes John Gruber have any experience in building hardware that would allow him to reasonably claim any such teardown report as bullshit? Or did he just do some simple math in his head and think to himself that Apple doesn't make that much money so it must be BS? Hardware costs are just one piece of the puzzle, manufacturing/IP/shipping/R&D/software/marketing are others.
- preview 16y agoThe prices vendors quote are also, in a sense, pulled out of thin air. There is some floor to the price based on cost to produce and minimum acceptable margin, and volume also plays a role. But, there are many other factors that are subjective. For example, perhaps the part manufacturer is looking to get its first part into Apple, so they knock some more off the price. While only Apply knows how much an Apple-proprietary processor costs, it is possible to estimate a cost for it based on process technology, die size, pin count, package, etc.
- hcho 16y agoBill of Materials is not equal to cost but it wouldn't be a Techcrunch headline otherwise.
- cubicle67 16y agoIt doesn't cost $188 to make; it costs $188 for a buckets of parts :) the 32GB iPhone 3GS used to retail in Australia for around US$850 ex tax. Assuming Apple's usual margin of 20-30% (let's say 30), and allowing another $50/unit for support/warranty issues, that puts the cost at something like $560 each.
- jonknee 16y agoThe iPhone has a much higher profit margin. Considering they what they sell the iPod Touch for and how similar it is in parts, you can do the math yourself. (The Touch hasn't been updated in a while, so we'll need to see a Touch HD for a good comparison now.) They even give the Touch away if you buy a Mac for college. Another thing, Apple charges more overseas. The 3GS retailed for a no-commit price in the states for $599/$699 depending on storage.
- twobar 16y agoWindows 7 costs $1.20 to make. 20 cent dvd + 20 cent packaging + 80 cent booklet (or whatever is in there.) A high end CPU costs below $3 in material costs. (Numbers purely guessed) Given these examples I find it wrong to accuse Apple for selling the iPhone at that price point. At least to me these "Product X costs Y USD in production" articles sound a bit accusing.
- hdanak 16y agoHow can you claim this if your numbers are purely guessed?
- eli 16y agoSoftware has no value? Crap, I need a new career.
- donohoe 16y agoDoes that include shipping, packaging, marketing, design, research, legal, office space, utilities, software and all the rest? Didn't think so.
- deleted 16y ago[deleted]
- vetinari 16y agoWhy do people mix SG&A into COGS discussion? We are talking gross margin here, not net profit.
- someone_here 16y agoPretty much. Apple is a public company... have you seen their profit margins?
- duck 16y agoAccording to this...no (from BW article): In 2009, iSuppli estimated that the components and materials used in the iPhone 3GS cost about $179. The materials costs on that device have since dropped to $134 as the prices of certain components have declined...
- lokiujhytyu 16y agoThats not the point - this isn't an attack on Apple's pricing it's a typical industrial teardown BOM. You can get them for everything. Retail price is typically 2-4x BOM depending on how complex the product is and how long it will be in the market It's interest to the consumer is when a cell phone company is charging you $500 for the phone AND locking you into a contract.
- duck 16y agoThe actual article: http://www.businessweek.com/technology/content/jun2010/tc20100627_763714.htm http://www.businessweek.com/technology/content/jun2010/tc201...
- pixelbath 16y ago"The gyroscope chip, for example, apparently costs Apple $2.60 while it costs $2.90 in quantities of 200,000. These disparities pop up in a number of places, which, sadly, lends an air of WTF to the proceedings." I'm not sure I understand this last statement. Should Apple not be getting a higher volume discount? I assume they're buying over 200,000 single parts.
- smokinn 16y agoGiven that they've already sold 1.7 million of them I imagine they committed to at least an extra 0 on the end of that quantity number.
- deleted 16y ago[deleted]
- ZeroGravitas 16y agoThis seems low, even compared with Apple's usual high margins. Do they bump up the standalone price to make the contract prices look better? On the other hand it explains the iPod Touch prices which have always seemed cheap by comparison.
- sandipagr 16y agoIf only I could get one at that price :( stuck with LG
- csomar 16y agoAs another commenter noted, design, innovation, packaging, marketing, employees and obviously profit/taxes... aren't counted here. But yes, the iPhone is pricey if I compare it to other devices. For example, Google Nexus One have a better resolution, memory and processor that the 3GS, but the 3GS is more expensive. I don't bother paying $1K or more on a phone, but at least this phone comes with cutting edge technology from the inside (speedy processor, large memory, Open OS...) and the outside (High resolution screen and Camera, amazing design...)
- ericd 16y agoIn what universe does this phone cost $1k or more?
- harshpotatoes 16y agoWell... If you include the money you'll spend for being in contract for the next two years, you're probably well over $1000. But, I don't think the OP was trying to say the down payment on the phone alone costs $1000.
- kierank 16y agoiPhone 4 32GB without a contract in the UK costs £599 which is about $900.