Barclays Says iPhone 5 Costs only $215 to Produce

You’d imagine an expensive - premium smartphone like iPhone 5 features such pricey components they account for half its price. According to a Barclays report published earlier this month, iPhone 5 costs only $215 to produce. 

The standard 16GB iPhone 5 is priced at $199 with a wireless service plan from AT&T, Sprint or Verizon, whereas the same standard 16GB iPhone 5, unlocked and contract free start selling at $649.00. It seems legit to pay three times the price of parts in the device, only to enjoy the perks of a factory unlocked contract-free iPhone. Barclays does add that the $215 price tag does not include the warranty cost, manufacturing cost, other components and logistics. 

“We estimate that NAND Flash accounts for about 10 per cent of the total iPhone cost, wireless components account about 16 per cent and the display about 20 per cent of the total” reads the report released at the beginning of the month by Barclays. But the price to build iPhone 5 is likely even more affordable today than it was a month ago estimates the report. 

The results of a preliminary teardown of iPhone 5 components concluded in September 2012 that the Bill of Materials (BOM) is only $168. Then an iSuppli report broke down all components in iPhone 5 by price and found out that the actual cost of building the hottest smartphone from Apple is in fact closer to $200.

“With the base model carrying a $199.00 BOM, the iPhone 5’s components are expected to be slightly more expensive compared to the iPhone 4S model” senior principal analyst Andrew Rassweiler estimated a few months ago. “The low-end iPhone 4S with the same memory density as the base-model iPhone 5 carried a BOM of $188.00, according to a preliminary estimate issued by IHS in October 2011” he added.