Apple iPhone 4 Costs as Much as $700, but Apple Pays $187.51 for Parts Discussion

[Jacqueline Emigh]

Exactly what's inside an iPhone 4, and how much does Apple pay for those parts? The cost of components has stepped up slightly with the latest model, although it's not nearly as steep as what Apple paid to buy the parts for the first iPhone.

Read the full content of this Article: Apple iPhone 4 Costs as Much as $700, but Apple Pays $187.51 for Parts

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[ViewRoyal]

So the parts are almost $200... but Apple's profit is not the remainder as you imply!

Take that $200 cost for parts. Then add cost of assembly. Then add packaging costs. Then add transportation costs. Then add legal fees and licenses. Then add marketing and advertising costs. Then add a year's worth of technical support costs on the hardware.

Add that all up, and the remainder is Apple's profit. (It's nowhere near the amount you imply it is).

Also remember that $700 may be the high-end retail cost you would pay at a non-Apple outlet (consumer electronics store or mobile service store), but Apple's wholesale price would be substantially less than the retail price.

[RickAgresta]

welcome to Brighthand, ViewRoyal

excellent first post

[WesMan]

also they ignore development costs which is normally a significant chunk of the unit price...

[Ed Hardy]

Notice that the title of this article is NOT "Apple iPhone 4 Sells for as Much as $700, but Costs Apple Just $187.51".

In addition, the article says "iSuppli's analysis of the iPhone 4 leaves out manufacturing as well as all other costs to Apple, such as software, royalties, and licensing fees."

The iPhone 4 is a bigger jump in technology than any previous iPhone upgrade. There was the possibility that better hardware like the high-res screen would significantly increase Apple's costs. The point of this article is to say that this didn't happen.
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[WaltFrench]

OK, so what additional insight is BrightHand providing in repeating this week-old study? Are we meant to feel good that Apple has provided room to reduce its price if competitive pressures force it to? Good that Apple charges an amount similar to inferior products? Bad that we could have saved $100 if Apple was a charity organization?

Or, as Joy of Tech put it, the Mona Lisa probably has about $10 of canvas & paint. That pretty much sums it up.

[hal]

WaltFrench, welcome to Brighthand!

OK, so what additional insight is BrightHand providing in repeating this week-old study? Are we meant to feel good that Apple has provided room to reduce its price if competitive pressures force it to? Good that Apple charges an amount similar to inferior products? Bad that we could have saved $100 if Apple was a charity organization?

Actually, the insight is about to be seen across this thread. Jaqueline's review, however it may not be totally innovative across the whole www, indeed offers a clear breakdown of the device's parts, so to make an effective point on the subject. Next, it's the contributions of members what will enrich the subject far above the plain text.

Or, as Joy of Tech put it, the Mona Lisa probably has about $10 of canvas & paint. That pretty much sums it up.

Very gooood point However, allow me to drive the discussion back on topic recalling that this is about a mass production device, not craft made. While I am personally not an advocate of Apple products, I perceive that their manufacturing operation is of a very high productivity and ROI ratio. In fact, before reading Jaqueline's review, I still held the notion that Apple was far more interested in the business through the iPhone than the business of the iPhone.

[Varjak]

[The second priciest component is that NAND-type flash memory, costing $27 for the 16 GB version of the iPhone 4.]

This part, for me, is the most galling. Because even if you assume that the 32 GB version costs $54 for NAND memory (and I seriously doubt that); Apple is really gouging the iP4 32GB buyers. It's even more telling with the iPad: It costs $100 to go from the 16 GB model to the 32 GB model; while going to the 64 GB model is also $100. Everything else is identical.