Apple Inc. (NASDAQ:AAPL) spends good money to create its smartphones, but comes away with healthy margins at the end of the day. Some tech teardown experts have analyzed the new 16GB iPhone 5 and estimated that Apple pays $167.50 to make a single device, which is $35 more than the 16GB iPhone 4S and $55 more than a similar iPhone 4.
The 16GB version of the iPhone 5 is expected to retail for $199 with a two-year-contract, or about $649 without the contract. Wireless carriers are expected to pay Apple Inc. (NASDAQ:AAPL) about $450 in subsidy for every iPhone 5 that is sold.
According to the breakdown by TechInsights, Apple Inc. (NASDAQ:AAPL) increased its spending on most components of the iPhone 5 from previous versions. For example, the larger display costs $18, which is 20 percent higher than the $15 spent on the iPhone 4S display. The Apple A6 processor si $28, which is 33 percent more than the $21 A5 processor in the 4S. Moving up fro 512MB of RAM to 1GB raised that cost from $3 to $4, an increase of 33 percent. But the biggest jump in the cost comes from the chip that is used, made by QUALCOMM Inc. (NASDAQ:QCOM) – the 4S chip cost $14 each, but this faster version costs $25 each, an increase of 78 percent.
The touchscreen and cover glass is estimated to be $7.50, up from $6.50 on the previous 4S version; the non-electronic components of the phone are up to $17 from $14 previously; and other miscellaneous components went up to $38 from $30 in the last iPhone itiration.
The new iPhone 5 is due to hit store shelves a week from today, September 21. Estimates have Apple Inc. (NASDAQ:AAPL) selling at leat 20 million devices by the end of 2012. That kind of number, combined with this estimated margin, would be very welcome news for investors in Apple stock, like hedge-fund manager Julian Robertson of Tiger Management.