Mobile

Cheapest iPhone 5 costs an estimated $168 to make but sells for $649

Image Credit: Apple

The 16GB iPhone 5, the least expensive of Apple’s new smartphone models, costs $167.50 to manufacture, according to an analysis by UBM Tech Insights.

Tech Insights estimates the iPhone 5 costs about $35 more than the iPhone 4S to make. The most expensive competent is the new A6 processor, which costs $28. The second-most expensive item is the Qualcomm 4G LTE modem, which runs $25.

While it’s a bit more expensive to make than the last model, Apple will still be collecting plenty of cash on the sale of iPhone 5 units. When a wireless carrier isn’t paying for a portion of the device, the 16GB iPhone 5 costs $649. With a wireless carrier subsidizing the cost, it costs $199 but you’re tied to two-year contract.

The cost difference between the $167.50 materials bill and the $649 sales price is $481.50. While some of that money goes into paying for Apple’s operations and marketing, it still makes a hefty profit. Apple collected $8.8 billion in net income last quarter alone.

Apple debuted the hugely anticipated iPhone 5 Wednesday, and preorders for the device started today. Preorders from Apple already have a two-week shipping estimate, and the carriers are about the same with their estimates, indicating huge demand.

You can take a look at Tech Insights’ full chart on the iPhone 5′s bill of materials below.

iPhone5-costs-168

iPhone 5 photo: Meghan Kelly/VentureBeat


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