• iSuppli: iPhone 4 Pretty Inexpensive to Produce

    Between iFixit's teardown of the iPhone 4 and iSuppli's subsequent analysis of the components, we're finally gaining some fairly telling insight as to how much it costs to physically produce a fourth generation iPhone. As you might expect, it isn't overtly expensive to manufacture Apple's updated smartphone.

    As it turns out, the iPhone 4 costs approximately $200 to manufacture - $187.51 to be as close to "exact" as possible, according to iSuppli. Kevin Keller, who helped orchestrate the iSuppli analysis, tells Businessweek that "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." So, given Apple's penchant for buying in bulk - and not your Costco or Sam's Club definition of buying in bulk - Cupertino has managed to procure millions of little parts in a relatively "inexpensive bundle."

    Keeping iPhone-part prices low helps Apple wring higher profit from its bestselling product, which made up 40 percent of revenue last quarter.
    For the break down, iSuppli used a 16-gigabyte version of the iPhone 4. It should be noted, however, that the $187.51 cost of production estimate does not take into account some of the latent but still costly elements of iPhone production - like labor, advertising, shipping, etc. Not surprisingly, Apple isn't formally commenting on the findings and estimates presented by iSuppli.

    Apple is currently peddling the 16-gigabyte iPhone 4 for $199, with the 32-gigabyte model going for $299 (with 2 year contract required). As Paul reported this morning on MMi, Apple says 1.7 Million iPhone 4s sold during launch weekend.

    Image via iFixit
    This article was originally published in forum thread: iSuppli: iPhone 4 Pretty Inexpensive to Produce started by Michael Essany View original post
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