Apple To Reap Windfall On iPhone 5 As Component Cost Is $167.50, Techs Say

  @DavidZie on

Apple (Nasdaq: AAPL), the world's most valuable technology company, should reap another windfall from selling the iPhone 5 because component costs are only around $167.50, engineers at UBM TechInsights reported.

Apple plans to sell the iPhone 5 starting next Friday at prices ranging from $199 to $399. The Cupertino, Calif., may sell as many as 42 million units of the new smartphone by Dec. 31, estimates UBS analyst Steven Milunovich.

Apple's main mobile carriers pay about $450 for every unit they sell.

Teams at engineering groups such as UBM TechInsights and IHS iSuppli, a unit of HIS (NYSE: HIS), a global research company, tear down electronic products and evaluate them for clients.

On a preliminary basis, TechInsights said components for iPhone 5 cost $35 more than for the year-old iPhone 4S. The biggest increase is for the long-term evolution (LTE) chip from Qualcomm Inc. (Nasdaq: QCOM), which speeds uploading and downloading content. The chip plus circuitry costs $25, or $11 more.

As well, the main A6 processor at the heart of the phone costs $28, or $7 more than for its predecessor. Apple hasn't disclosed its manufacturer, which previously was Samsung Electronics (Seoul: 005930) but could be Taiwan Semiconductor Manufacturing Co. (Taipei: 2330). The A6 designs usually come from ARM Holdings (Nasdaq: ARMH) of the UK, which also lacks production lines.

TSMC is the principal manufacturer of chips for Qualcomm as well as Broadcom (Nasdaq: BRCM), which provides the connectivity circuit.

The engineers will know for sure when they open up an actual product.

The higher-resolution display adds another $3, the engineers said. They are believed to come from Samsung, LG and Sharp Corp. (Tokyo: 6753), which set up a supply arrangement with Apple earlier this year.

Apple shares set another record high of $696.98 on Friday before easing back to $696.65, up $13.67 in midday trading.

Join the Discussion
Nintendo's Newest Kirby Game Is A Total Detour
Nintendo's Newest Kirby Game Is A Total Detour
Fitbit's First Activity Watch Falls Short
Fitbit's First Activity Watch Falls Short
Dying Light Is The Spiritual Successor To 'Dead Island'
Dying Light Is The Spiritual Successor To 'Dead Island'
The Last Mitsubishi Evolution
The Last Mitsubishi Evolution
The i8 Is Proof BMW Should Make More Mid-Engined Cars
The i8 Is Proof BMW Should Make More Mid-Engined Cars
QD Vision Shows Off Cheap 4K TVs
QD Vision Shows Off Cheap 4K TVs

More Video