iSuppli researchers have disassembled the iPhone 4 and conclude Apple's new smartphone has a component cost of about $187.15, almost ten percent more than the initial cost of the iPhone 3GS. The single most expensive component in the iPhone 4 is the 3.5" LCD screen, iSuppli estimates the screen costs $28.50, while the devices' A4 processor costs an estimated $10.75.
Research firms conduct so-called teardown analysis of consumer electronics products to determine component prices, identify suppliers, and estimate profit margins. Keeping iPhone-part prices low helps Apple wring higher profit from its bestselling product, which made up 40 percent of revenue last quarter.
"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," Kevin Keller, who helped conduct the iSuppli teardown, says in an interview.
The estimate doesn't include costs for items such as labor, shipping, advertising, software development, or patent licensing.