IPhone Parts Cost About $200

The prices for materials, however, are initial estimates, according to analyst firm Portelligent.

Antone Gonsalves, Contributor

July 2, 2007

2 Min Read

People who are starting to feel uneasy about the price they paid for their iPhone may soon become despondent when they find out that a teardown analysis indicates that the cost of materials to make the fancy device was about $200.

Analyst firm Portelligent on Monday said a quick study of the device indicated that the cost of components was about $200 for the $500 iPhone, and about $220 for the $600 phone. The prices for materials, however, are initial estimates. "When we finish, we will have less of a guesstimate and more of a solid estimate," Howard Curtis, VP of global services for Portelligent, told InformationWeek. "It'll take a little time."

The research firm tore apart the iPhone, which Apple launched Friday evening with lots of fanfare, mostly to determine which companies have the bragging rights for getting their semiconductors and processors into the high-profile device.

"(The iPhone) has gotten an enormous amount of buzz, and from an initial look inside, we think it's a very interesting product," Curtis said. "There's a lot of interest from the standpoint of bragging rights."

Boasting, however, is about all the companies have, since it's too early to know whether the phone will be a success in the market. Initial reports are favorable, however. Investment firm PiperJaffray estimates that Apple sold more than a half million iPhones over the weekend.

Suppliers that got their products in the most highly anticipated consumer electronics device of the year include Infineon, which provided the core cellular communications through its transceiver and baseband processor.

Skyworks supplied the power amplifier module to help the iPhone operate on AT&T's GSM/EDGE cellular network. The storage component came from Intel and Samsung, and the contributors to the technology behind the iPhone's innovative touch-screen included Broadcom, NXP, and National Semiconductor.

Micron Technology provided the camera module, and Wolfson Microelectronics supplied the key chip, called an audio CODEC, for the rendition of high-quality music.

Other suppliers who contributed less central, and thereby less profitable, components include Linear Technology, Texas Instruments, STMicro, SST and RFMD.

As for consumers, they shouldn't feel so bad about paying so much more than the cost of the device. "For a high-end smartphone, it's not at all unprecedented," Curtis said.

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