iPhone 4 Materials Cost Under $190: iSuppli

iSuppli's Teardown Analysis services physically took apart an iPhone 4 with 16 GB of memory to explore the device's components and estimate Apple's cost to build it.

The 16-GB iPhone 4 retails from $199 when upgrading from certain existing plans to $599 for customers not eligible for early upgrades or who buy the device as a gift.

The $187.51 figure includes only the cost of the components, and excludes the manufacturing, software, marketing, and distribution costs as well as any royalties or licensing fees Apple pays.

The most expensive component in the iPhone 4 is its 3.5-inch low-temperature polysilicon (LTPS) LCD screen from either LG Display or Toshiba Mobile Display, which iSuppli estimates costs about $28.50. The LCD screen is complemented by a captive glass touch screen which iSuppli said costs about $10.00.

The Samsung A4 APL0398 applications processor with 4 Gbits of DRAM and other discrete components costs a total of $25.05. It connects to 16 GBs of Flash memory from Samsung which costs an estimated $27.00, iSuppli said

The iPhone 4's wireless subsection is the most integrated of any of the nearly 300 cell phones iSuppli tore down, and relies on the metal housing of the outer enclosure of the device for the antenna in order to save internal space.

The iPhone 4 represents a new height in terms of industrial design, electronics integration, and user interface, wrote Kevin Keller, iSuppli's principal analyst of teardown services, in a statement.

"With the iPhone maintaining its existing pricing, Apple will be able to maintain the prodigious margins that have allowed it to build up a colossal cash reserve—one whose size is exceeded only by Microsoft Corp.," Keller wrote.

The bill of materials cost of $187.51 for the iPhone 4 compares with $170.80 for the iPhone 3GS in 2009, $166.31 for the 3G in 2008, and $217.73 for the first iPhone in 2007.