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How Expensive Apple iPhone 5 Really Is?

By VJ
If you are holding your Apple’s new iPhone 5, the latest entrant of Apple’s products, you may be wondering how slick and vibrantly modern the device is. iPhone 5, just as any Apple product, is designed like a next generation device and manufactured with the precision of a Rolex. Many have wondered why iPhone is so luxurious. Why is Apple iPhone so expensive? Only the details of the parts that make up the smartphone will reveal why it is so costly. In this edition of Blue Bugle, let’s look at the parts of iPhone 5 and see what each costs.

iFixit has recently torn down the iPhone and studied its parts. A market research firm, iSuppli has published the details of various parts of iPhone with its price. The breakdown is as follows:

the component Details 16 GB model 32 GB model 64 GB model
The Touchscreen display 4 inch LCD IPS display panel $44 $44 $44
Memory (Flash storage memory) NAND Flash internal storage $10.4 $20.8 $41.6
Main memory 1 GB (LPDDR) RAM $10.45 $10.45 $10.45
The microprocessor Apple A6 $17.5 $17.5 $17.5
Battery 1440 mAh Lithium Polymer battery $4.5 $4.5 $4.5
Cameras Front and back iSight cameras (1.2 MP and 8 MP) $18 $18 $18
UI & Sensers $6.5 $6.5 $6.5
Bluetooth & WLAN BT v 4.0 & Dual-band wireless IEEE 802.11 n $5 $5 $5
Wireless part Qualcomm MDM9615+RTR8600+Front end $34 $34 $34
Others Sum total of other important parts $48.5 $48.5 $48.5
Manufacturing cost $8 $8 $8

This makes the current manufacturing cost of iPhone 5 at 206.85 dollars for the 16 GB model, 217.25 for 32 GB and 238.05 dollars for 64 GB. The current market price of each of these models is as follows: 16 GB: 649 dollars, 32 GB: 749 dollars, 64 GB: 849 dollars.
That means, Apple makes profits of $442.15, $531.75, $610.95, respectively. What the heck! eh?


There is a hundred dollar difference between the three models, and the actual and only difference between them is the amount of memory offered. And that memory itself costs $10.4 as you saw earlier. That means about ten times more for the next upgrade.

Factors that increased the price of this iPhone include the 4G LTE support (the wireless part at 34 dollars), the display part (since it is larger), and the new Apple A6 processor.

In effect, Apple iPhone 5 is extremely overpriced even if you take into account other factors like the salary of designers and software programmers in Apple. For a salary overview, visit Glassdoor.

The predictions of sales of the iPhone 5 are at about 27 million within the end of the current quarter, and about 50 million within the next quarter.

All said, I believe Apple is among the companies that really love its products. This is probably the reason why everybody loves iPhone.
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