3G iPhone will be cheaper to produce than predecessor

Apple’s second generation iPhone will have a bill of manufacture (BOM) of just $173, according to industry analysts iSuppli.

The firm performed a ‘virtual teardown’ – based on intelligence gathered by its experts in fields of semiconductors, displays, mobile handsets, consumer electronics and wireless infrastructure.

 “The new iPhone is significantly less expensive to produce than the first-generation product, despite major improvements in the product’s functionality and unique usability – due to the addition of 3G communications,” said Dr Jagdish Rebello, director and principal analyst for iSuppli.

The original 8GB iPhone carried a cost of $226 after component price reductions – which gives the new product a 23 per cent hardware cost reduction due to component price declines – claimed Rebello.

 3G iPhone Virtual Teardown Results 8GB Version (US$)

  • 8GB NAND Flash Memory, 22.80
  • Improved Touch Screen, 20.00
  • Display, 20.00
  • Application Processor, 13.50
  • 1GB SDRAM – Mobile DDR, 5.00
  • HSDPA Digital Baseband, 15.00
  • 2 megapixel Camera Module, 7.00
  • WLAN chipset, 4.00
  • Battery, 4.00
  • GPS, 3.60
  • Motion Sensor/Accelerometer, 2.00
  • RF Transceiver, 4.25
  • 64Mb NOR Flash Memory 23Mb PSRAM, 1.89
  • Charger (USB), 1.80
  • Bluetooth 2.0 + Enhanced Data Rate (EDR), 2.00
  • Other costs, $37
  • Manufacturing Costs, $9
  • Total BOM & Manufacturing Costs, $173

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