iPhone 5 release: new iPhone costs Apple an estimated $207 to build

According to a virtual “teardown” of the device by market researcher IHS iSuppli, Cupertino pays an estimated $199 to build the hardware of a 16 GB iPhone 5.

Adding another $8 for manufacturing costs, brings the total to $207.

The bill of materials for the 32GB version sums up $209 and $230 for the 64GB model.

The addition of LTE capabilities and the A6 CPU added to the costs of the materials, as compared to the previous iPhone.

The bill of materials for last year’s iPhone 4S was estimated to be $188.

“While the price of some components, such as NAND flash, has fallen during the past year, the iPhone 5’s overall BOM has increased mainly because its display and wireless subsystems are more expensive compared to the iPhone 4S,” said Andrew Rassweiler, senior principal analyst of teardown services for IHS.

The new 4-inch display is the priciest component, estimated at $44, followed by the wireless section, with a cost of $34, the 8-megapixel camera, priced at $18 and A6 SoC – $17.5.

“The iPhone 5 makes a big evolutionary step in technology that we have not seen elsewhere with the use of in-cell touch sensing,” Rassweiler said. “Most other smartphones LCDs use a completely distinct capacitive touchscreen assembly that is physically separate and placed on top of the display. The iPhone 5 partially integrates the touch layers into the display glass, making the product thinner and reducing the number of parts required to build display that senses touch without the need for a separate capacitive touch layer.”