iPhone 5 cheaper to manufacture than previous iPhones

TechInsights made a detailed estimate regarding the bill of materials (BOM) of Apple's upcoming iPhone and predicts the device costs around $167.50 to manufacture. That's about $35 more than the iPhone 4S' current BOM, but as FUD Zilla notes, it's significantly less than the iPhone 4S and iPhone 4 launch-time BOM. The site also notes that Apple continues to ask $100 for a storage bump, even though the price of 16GB of NAND flash memory has collapsed to as little as $9.

In spite of the new processor, bigger screen and LTE, Apple seems to have done a brilliant job in keeping costs down. In October last year, the iPhone 4S BOM was estimated at $188, while the iPhone 4 carried a BOM of $187 when it launched back in June 2010.

The iPhone 5 has the lowest BOM of any Retina iPhone to date, but the price tag has not changed. Of course, 32GB and 64GB units carry even higher margins and this time around the margins will be huge. Back in 2010, 16GB of NAND cost Apple an estimated $27 according to iSuppli. A year later the figure dropped to $19, according to the same source. This year it’s just $9, but Apple will still charge consumers $100 for a storage bump. Ouch.