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Apple’s (NASDAQ:AAPL) lighter and faster iPhone 5 is selling out fast, but the device may have presented the company with a much bigger manufacturing bill than its predecessors. Apple could be spending as much as $167.50 to manufacture each 16GB iPhone 5 that retails at a subsidized $199. That estimate came from research firm UBM TechInsights, which broke down the cost of each component of the device to arrive at the figure.
Except for the battery and the NAND flash storage, every component costs more for the iPhone 5 than for the previous two models, according to the research firm. The 16GB iPhone 4S currently costs Apple $132.50 to build, while the 16GB iPhone 4 can be made for $112.
According to the bill of materials arrived at by TechInsights, while the new four-inch display on the iPhone 5 costs $18, the touchscreen makes up another $7.50, and the phone battery is priced at $3. Apple spends $28 on its in-house A6 processor, while the new camera on the phone is manufactured for $10. The cost of the built-in WiFi/Bluetooth/GPS is $4. Unsurprisingly, one of the biggest costs is related to the addition of 4G LTE technology, with the circuitry coming with a price tag of $25, according to TechInsights.
However, the research firm added that these were strictly estimated figures and that a more dependable calculation will be arrived at only after the firm breaks down the device on September 21.
While the 16GB iPhone 5, the cheapest model on offer, sells for $199 with a two-year wireless contract, the 32GB model costs $299 and the 64GB version is priced at $399. Those, of course, are subsidized prices. Apple’s profit margins on the device are still relatively high as the company receives a fee from wireless providers in exchange for the subsidies. The unsubsidized price of the handset is said to be close to $650.
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