Tuesday, September 24, 2013

Teardown of iPhone 5c, 5s place device cost at $173, $199 respectively

IHS iSuppli just loves to teardown electronics of any type, and especially new iPhones and iPads. Its latest teardowns, of the iPhone 5s and 5c (via AllThingsD, on Tuesday), show the new flagship iPhone costs a minimum of $199 (including assembly) to build, while its multi-colored sibling costs $173, minimally.

For the iPhone 5S, Apple spends at least $191 on components to build a 16 gigabyte iPhone 5s. Tack on another $8 for assembly, and the cost is $199, total. The cost rises to $218 (including assembly) for a 64GB unit.

It's pretty sad to see that Apple adds $200 to the price of an iPhone 5s for the extra 48GB, but it only costs them $19 extra.

Despite the improvements that Apple made to the device, this is less than the cost of the iPhone 5, which IHS tore down last year. Last year, the iPhone 5's cost was pegged at $205 for a 16GB model.

That cost estimate is pretty close to that of the original iPhone 5, which IHS pegged at about $205 last year. Sans carrier subsidy, the iPhone 5S sells at prices ranging from $649 to $849, depending on internal storage capacity.

The display costs more than any other single component in the iPhone 5S. The $41 display, IHS said, likely comes from several suppliers, including LG Display, Japan Display, and Sharp (in which Apple earlier made a strategic investment).

The lower priced, plasticky, and multi-colored iPhone 5c costs between $173 and $183 for Apple to build, including assembly. Without a contract, the 5c sells for between $549 and $649.

While many see the 5c as just a substitute for Apple selling a year-old device -- in this case, it would have been the 5 -- it's not that simple. Apple is leveraging economies of scale by making the differences between the 5c and 5s few and far between. IHS analyst Andrew Rassweiler, who oversaw the teardown work, said:
I would say that they’re almost the same phone, except that the 5s has the fingerprint sensor, the A7 processor and some newer memory chips that consume less power. Beyond that, they’re basically the same.
In addition, Rassweiler said, Apple is pushing its RF suppliers to do things they wouldn't do for other vendors. It is, of course, leveraging the power it has as the company behind the single most popular smartphone in the world.

Samsung and Android may have the lion's share of the smartphone market globally, but in terms of one single phone (or in this case, two), Apple rules the roost.
Apple seems to be spending a lot of time and money combining RF chips. Where other phone companies would be using whatever chips its various vendors sell off-the-shelf, Apple seems to be pushing its RF suppliers to do things they don’t do for anyone else.

The iPhone 5 supported no more than five LTE bands. The 5s and 5c can support as many as 13, and that’s unique. Unlike other phone designers, Apple has spent a lot of time collaborating with the RF chip companies to find novel solutions that its competitors don’t have.
It's true that Apple still sells two different versions of the phones. It sells the iPhone6,1 and iPhone5,3 variants, as well as what are called the "global" versions, iPhone6,2 and iPhone5,4. However, Rassweiler said, eventually the company may be able to produce a single hardware version of the phone that supports all the world’s frequency bands.

IHS iSuppli won't release its report until Wednesday, but AllThingsD got an early peek.

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