Wednesday, September 19, 2012

Apple Inc. (NASDAQ:AAPL)’s iPhone 5 the Most Expensive Handset from the Company Stable?

Market Researcher IHS iSuppli has revealed that since the Apple Inc.(NASDAQ:AAPL) iPhone’s debut in 2007, the iPhone 5 is the most expensive handset till date. A bigger screen, better touchscreen technology, and faster processor, has pushed up the manufacturing cost of the 16 GB entry- level iPhone 5 to $207.

The iPhone accounts for two-thirds of its profit from handsets and the number of pre-orders for the iPhone 5 has already broken records of its predecessors. The manufacturing and bill-of-materials expenses for the entry-level handset comprise 32% of the non-contract sales price of $649. Carolyn Wu, a Beijing-based spokeswoman for Apple, has refused to comment on the issue. Non-contract prices are not listed on the Apple website because orders are only available via contracts with carriers.

The 16 GB model is made of materials that come up to $199 and the manufacturing cost is $8. For the 64 GB version, the cost shoots up to $238, which is priced at $399 as the extra storage is expensive. The first iPhone in 2007 had only 4GB storage. A slightly better version with 8GB storage had a manufacturing cost of $265.83, as per iSuppli.

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Apple has not been too happy with earlier break-downs of the manufacturing costs of its devices. Apple CFO Peter Oppenheimer has said in July that the third-part reports are incomplete as many cost categories and the components are missing. iSuppli has stressed that the analysis excludes software, royalty, licensing, research marketing, administrative and other expenses in terms of sales and design.

Wireless chips for the iPhone 4S went up to $34 from $24 and the display and touchscreen expenses went up from $37 to 44$. However, memory chips underwent a fall in price, which is why the cost of storage is low by 45% in the most expensive model with 64GB

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