iPhone 5 costs $207 to manufacture

[BladeVenom]

www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-$199-BOM-Virtual-Teardown-Reveals.aspx

Don't you love how an extra 16GB of memory costs them $10, but they charge $100 for it.

 

[Tom]

yea, but nobody needs the extra memory. I think they market those models to people who aren't price conscious but want the "best".

Same way it doesn't cost a lot more to make a Lexus rather than a Toyota.

 

[Suspicious-Teach8788]

I don't know why this is always an issue. High end smartphones have always cost an arm and a leg. $600 is the new standard for smartphones and has been for years, but even high end feature phones were $300-$450 back in the day.

I feel like the American public makes this a bigger issue than it should be simply because we grew up in an era of free Motorola Razrs or something, and $199 smartphones. The concept of bringing your own device is still almost unheard of and those who do are viewed as idiotic.

 

[jpeyton]

Industry leading margins

 

[mikegg]

www.isuppli.com/Teardowns/News/Pages/iPhone5-Carries-$199-BOM-Virtual-Teardown-Reveals.aspx

Don't you love how an extra 16GB of memory costs them $10, but they charge $100 for it.

Law of supply and demand. Nothing to see here.

When you have an advantage in business, you use it. Do people know anything about how businesses work here?

 

[badb0y]

Law of supply and demand. Nothing to see here.

When you have an advantage in business, you use it. Do people know anything about how businesses work here?

Nope I only care about my widgets.

 

[Rayb]

I don't know why this is always an issue. High end smartphones have always cost an arm and a leg. $600 is the new standard for smartphones and has been for years, but even high end feature phones were $300-$450 back in the day.

I feel like the American public makes this a bigger issue than it should be simply because we grew up in an era of free Motorola Razrs or something, and $199 smartphones. The concept of bringing your own device is still almost unheard of and those who do are viewed as idiotic.

I've got not problem paying $600 for a phone when it has the latest available tech at time of release. That said, this is not it! :whiste:

 

[BenSkywalker]

Don't you love how an extra 16GB of memory costs them $10, but they charge $100 for it.

To be fair to Apple, it isn't like they are the only company that does this. Google hits you for $50 for an extra 8GB on the Nexus 7, same obscene margin that Apple gets.

 

[Bateluer]

yea, but nobody needs the extra memory. I think they market those models to people who aren't price conscious but want the "best".

Huh? Sarcasm? I've a 32GB Galaxy Nexus, and have filled 20GB of it with almost little effort. Could easily fill up the entire 32 if I wanted to. And 32GB should be the minimum quantity of internal storage for a phone.

 

[T_Yamamoto]

Huh? Sarcasm? I've a 32GB Galaxy Nexus, and have filled 20GB of it with almost little effort. Could easily fill up the entire 32 if I wanted to. And 32GB should be the minimum quantity of internal storage for a phone.

DAMNNNN

What do you keep? 1080p movies and videos with a ton of pictures?
I'm only using 8

 

[Bateluer]

DAMNNNN

What do you keep? 1080p movies and videos with a ton of pictures?
I'm only using 8

Few games, few hundred pictures, some video clips, ebooks, audio books, few dozen apps, some apps have collections of HD videos I chose to download to improve usability, etc.

 

[qtnguyen87]

Few games, few hundred pictures, some video clips, ebooks, audio books, few dozen apps, some apps have collections of HD videos I chose to download to improve usability, etc.

Would life suck if you lost your phone?

 

[Phokus]

To be fair to Apple, it isn't like they are the only company that does this. Google hits you for $50 for an extra 8GB on the Nexus 7, same obscene margin that Apple gets.

Well, not exactly, they barely make anything at all on the 8 GB version of the nexus 7.

 

[Ravynmagi]

Well, not exactly, they barely make anything at all on the 8 GB version of the nexus 7.

Google isn't trying to make money off the hardware. And what Google makes or doesn't make off the hardware still doesn't ease the annoyance of having to pay $50 for just 8GB more storage.

If Google wanted to make a few bucks off the hardware, then they should have charged $225 for the 8GB model, so that the 16GB upgrade didn't feel as painful to the buyer.

 

[gorcorps]

DAMNNNN

What do you keep? 1080p movies and videos with a ton of pictures?
I'm only using 8

I use my phone as my mp3 player and that alone takes up 10 gigs. Apps are also getting up there too so if you install a lot of them it'll fill up.

 

[luv2liv]

all Apple needed was a 10 cent sticker with the number "5" on it


http://www.youtube.com/watch?v=rdIWKytq_q4

 

[buckshot24]

Google isn't trying to make money off the hardware. And what Google makes or doesn't make off the hardware still doesn't ease the annoyance of having to pay $50 for just 8GB more storage.

If Google wanted to make a few bucks off the hardware, then they should have charged $225 for the 8GB model, so that the 16GB upgrade didn't feel as painful to the buyer.

The problem with that is that 25 bucks isn't a large enough spread between the two models. As far as I know the 16 GB version outsold the 8 GB nexus 7. Having the 8 GB model at $225 would have just made it worse.

 

[vi edit]

Yeah, I'm fairly routinely banging the memory limits of my 16 gig phone. I cache a pile of slacker stations to it. I think that accounts for like 5 gig worth. Plus I'm horrible about cleaning up pictures. I'm at like 1600 some pictures + video. And that's not even counting apps.

I wouldn't feel quite as fleeced if 32 gig was the standard at $199. I think Apple would still manage to come out okay on the accounting side that way.

 

[Bateluer]

Would life suck if you lost your phone?

I'd never lose my phone. Have it stolen, possibly. But I imagine that having their smartphone stolen would make things suck for anyone.

 

[corkyg]

Cost to manufacture is only a piece of the cost to produce. To that you have add its share of G&A expenses - sometimes costlier than the manufacturing process.

 

[Ravynmagi]

The problem with that is that 25 bucks isn't a large enough spread between the two models. As far as I know the 16 GB version outsold the 8 GB nexus 7. Having the 8 GB model at $225 would have just made it worse.

8GB model really should have never existed in the first place... But I'll stop there, I'm getting a bit off topic I guess.

 

[coloumb]

No surprise. A lot of companies significantly mark up the prices to cover R&D, warranty, support costs. How else are they going to stay in business?

 

[_Rick_]

Blame the phone companies being to generous with their subventions.
It's a strange world, where a tablet is more affordable, than what is essentially the same thing, just with a smaller screen and battery.

 

[Tom]

No way a Nexus 7 costs $199 to produce if an iphone 5 costs $207.

 

[ponyo]

No way a Nexus 7 costs $199 to produce if an iphone 5 costs $207.

Nexus 7 is less but it isn't too far off from iPhone 5. Remember Google is giving away $25 in Google Playstore credit and $10 in Google Wallet credit. That's $35 extra. I bet 8 gb Nexus 7 is somewhere between $150-175.

iPhone 5 has no special hardware. What makes you think iPhone 5 has expensive build?

This pricing difference shows how harmful subsidies are. If not for the carrier subsidies, retail phone prices would be similar to tablets.