Anticipation is building for the iPhone 5, expected to come later this year, but a look at HTC's cutting edge Thunderbolt offers clues to what Apple could be packing into the next-gen smartphone.
A teardown of the Taiwanese phone revealed the highest bill of materials (BOM) ever seen on a cell phone, rivaling even some fully fledged tablets.
But of particular interest is fact that the Thunderbolt is the one of the leading 4G -- or post 3G networking using phones, and the top seller at Verizon.
The 4G Long Term Evolution (LTE) wireless chips required for the faster speeds in the Thunderbolt cost an extra $39.75, according to industry researcher IHS.
This presents a problem for Apple, which observers believe is mulling adding the capability to its forthcoming iPhone 5.
There are some options.
Apple could forgo 4G technology all together. Indeed some analysts have predicted just as much, given the current chips are relatively new technology.
Indeed, Apple dropped a hint at the Verizon press conference in January that it will be conservative with the implementation of LTE, primarily because of battery and other concerns that didn't meet Apple's demands.
On the other hand, there are already three models of LTE phones on the market from competitors Samsung, and LG, as well as HTC's Thunderbolt.
To combat, they could adopt 4G, with compromises because of the size and price of the chip.
First, the iPhone's minuscule printed circuit board (PCB) will have to grow in size in order to support the first-generation LTE baseband processor as well as all the supporting chipset, explained firms senior analyst, Wayne Lam.
Second, the next iPhone's BOM value certainly will increase substantially compared to the iPhone 4 if LTE is implemented in the same manner as in the HTC Thunderbolt.
The current iPhone 4 costs $171.35 to make, meaning the addition would run costs up to roughly $211 per unit, cutting down on Apple's margins, which could be passed on to the consumer.
But seeing that Apple executives have publically complained about the poor designs of current LTE chips. With that, Apple could opt to use someone else entirely.
Qualcomm's SnapDragon MSM8960 is a newer version of the 8655 part used in the Thunderbolt.
It combines LTE, the EVDO standard for existing CDMA networks, and the GSM standard used at AT&T, in one chip, allowing Apple to sell one iPhone 5 that can run on multiple networks.
Given the iPhone 5 is expected to ship a lot more units than HTC's Thunderbolt, Apple has the advantage of pushing down prices even more.
I would imagine the caveat would have to be added that strict cost of components may vary between Apple and HTC, given Apple's purchasing power in the semiconductor market, Lam says.