Design Changes Lower BOM for Verizon iPhone 4

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Posted February 10, 2011 at 5:00pm by iClarified

The latest version of the iPhone 4 carries a BOM of $171.35, down from $187.51 for the previous model, based on a preliminary pricing estimate issued in June. When manufacturing expenses are added, the total production cost for the CDMA iPhone 4 amounts to $178.45. This is due to significant changes in Apple's design and component selection for the new device.

"With the CDMA iPhone 4, Apple Inc. has shown once again that it never recycles a product design," said Andrew Rassweiler, senior director, teardown services, for IHS. "Apple's new designs always exhibit changes, evolution and optimization. This approach is evident not only in the antenna design but also in items like the integrated GPS functionality and the shrinking of the Wi-Fi/Bluetooth combo module. As we dig deeper into our teardown analysis, we're certain that we will find a host of other tweaks all designed to improve quality but keep costs on a steady path of decline."

The attached table presents the preliminary IHS iSuppli estimate of the bill of materials (BOM) and manufacturing costs of the CDMA iPhone 4. Please note that this cost assessment is preliminary in nature, and accounts only for hardware costs and does not take into consideration other expenses such as software, licensing, and royalties or other soft expenditures.