LONDON–()–The bill of materials (BOM) for an iPhone 7 equipped with 32 gigabytes

(GB) of NAND flash memory carries $219.80 in bill of materials costs,

according to a preliminary estimate from IHS Markit (Nasdaq: INFO), a

world leader in critical information, analytics and solutions.

After $5 in basic manufacturing costs are added, Apple’s total cost to

manufacture the iPhone 7 rises to $224.80. The unsubsidized price for a

32GB iPhone 7 is $649. IHS Markit has not yet performed a teardown

analysis on the larger iPhone 7 Plus. This preliminary estimated total

is $36.89 higher than the final analysis of the iPhone 6S published by

IHS in December 2015.

“Total BOM costs for the iPhone 7 are more in line with what we have

seen in teardowns of recent flagship phones from Apple’s main

competitor, Samsung, in that the costs are higher than in previous

iPhone teardown analyses,” said Andrew

Rassweiler, senior director of cost benchmarking services for IHS Markit.

“All other things being equal, Apple still makes more margin from

hardware than Samsung, but materials costs are higher than in the past.”

Same shape. No jack.

While the overall shape and physical design of the iPhone 7 is similar

to the iPhone 6S that preceded it, the new display has wider color

gamut, including DCI-P3 as well as traditional sRGB, which improves the

rendering of photos and videos. The device’s haptic engine, which

provides the “click” feel for users, has also been improved for

longer-duty cycles and better dynamic response. The home button is now

static and mimics the MacBook in terms of a solid-state button design.

Apple has also eliminated the 3.5 millimeter headphone jack, allowing a

larger battery and haptic motor. “Where there was an audio jack in the

previous design, Apple replaced it with a symmetrical grill — not for

speakers, but for the waterproof microphone, leaving more room for the

larger battery and Taptic Engine,” Rassweiler said.

Increased base-model storage

Apple has increased the iPhone 7’s storage density. For the first time,

the base model starts at 32 gigabytes (GB) – which is only the second

time Apple has upgraded the base storage in the iPhone. From a cost

perspective, the shift from 16GB/64GB/128GB iPhones to 32GB/128GB/256GB

is a big jump. “Despite significant cost erosion in NAND flash over the

last year, this increase in the overall memory cost definitely puts

pressure on the bill of materials costs — and therefore margins — from

Apple’s perspective,” Rassweiler said.

Intel returns

The Intel design win, and six years of absence that Intel had from the

iPhone, is important to note. Even so, Intel still shares the processor

business with Qualcomm. “Whereas Apple strives to have ‘one iPhone model

for all carriers and markets,’ there are a number of different hardware

permutations supporting various countries and carriers,” Rassweiler

said. “Apple will likely look for ways to simplify the design moving

forward, which means one supplier – whether Intel or Qualcomm – will

likely dominate, as part of supplier and SKU streamlining.”

According to Wayne

Lam, principal analyst of smartphone electronics, IHS Markit,

“Largely left behind in the 4G LTE market, Intel has finally worked

itself back into the iPhone, which is a huge win, but not one that is

going to be financially significant in the near term for Intel.”

RF paths

Apple has also eliminated segmented antenna bands, which means the

company is pushing all radio-frequency (RF) paths to the very ends of

the phone – both on the top and bottom. The aluminum uni-body

construction and design forces all RF paths into those two locations.

Whereas other smartphones use a glass back and RF components with

antennas mounted on the ample back spaces, Apple is restricted to just

two physical antennas. “This design limitation may force Apple to go

back to an all-glass design again so that they can fit in 4x4MIMO LTE

antennas and more features like wireless charging in the next iPhone

iteration,” Lam said.

Modem moved

The baseband thin modem has been moved next to the A10 processor. Prior

to the iPhone 7, the thin modem was always on the other side of the SIM

card receptacle. “This is a subtle change but likely shows us where

Apple wants to take this,” Lam said, “eventually putting the thin modem

right on the apps processor package or even integrating it into the

A-series processor.”

Officially water resistant

iPhone 7 is now officially rated as water resistant. “We also saw

evidence of this water proofing design evolution in the earlier iPhone

6S, which included additional gasketing around critical connectors, as

well as the use of WiFi antenna at the end of the primary speaker

box,”Lam said. “Doing so pushes the antennas near the only other

opening, for better reception and transmission.”

Jet-black polished case

Jet black polish is a new option on 128GB and 256GB models. “This is a

new feature that produces a whole new look for the iPhone,” Lam said.

“It is a lower yielding, time-intensive manufacturing step that adds

cost, as well as considerable value, pushing the retail price higher for

those requesting this option.”

Antenna speaker design

The antenna speaker design on the iPhone 7 came from the WiFi antenna

packed into the speakers of Apple’s MacBook. “Apple likes to reuse these

unique designs throughout their product lines,” Lam said. In a first for

the iPhone series, the headset speaker now doubles as a stereo speaker.

Upgraded camera

While not as groundbreaking as the two optical paths in the iPhone 7

Plus, the iPhone 7 camera has now been upgraded to optical image

stabilization (OIS), for better low light performance.

Improved battery life

The battery has been increased to 1960mAhr capacity from 1715mAh in the

previous iPhone 6s. This change is consistent with Apple’s claims of

improved battery life.

 

 

 

 

 

 

 

 

 

Apple iPhone 7 32GB (A1778)

 

 

 

 

Cost Summary

 

 

Direct Material Costs

 

$

219.80

(Component Costs)

Conversion Costs

$

5.00

(Assembly / Insertion / Test Costs)

Total Cost

$

224.80

(Direct materials and manufacturing)

 

 

 

 

 

 

 

 

 

Itemized Components

 

Manufacturer Name

 

Manufacturer Part Number

 

Description

 

Total Cost

Apps Processor

 

 

 

 

 

 

 

 

System-on-Chip

 

TSMC (Apple)

 

APLW24

 

Apple A10, Quad-Core 64-Bit ARM Based CPU, Hexa-Core

GPU,

16nm FinFET

 

$

26.90

Baseband / RF / PA

 

 

 

 

 

 

 

$

33.90

Baseband

 

INTEL CORP

 

PMB9943

 

Baseband Processor, Multi-Mode

 

 

RF Transceiver

 

INTEL CORP

 

PMB5750

 

RF Transceiver, Multi-Mode (Qty:2)

 

 

RF Front End

 

 

 

 

 

 

 

 

Antenna Switch Module

 

TDK CORP

 

D5313

 

Antenna Switch Module, w/ Filters

 

 

Antenna Switch Module

 

TDK CORP

 

D5325

 

Antenna Switch Module, w/ Filters

 

 

Envelope Tracking

 

QORVO INC

 

81003M

 

Envelope Tracking IC

 

 

FEM

 

BROADCOM LTD (AVAGO)

 

DFI620

 

FEM

 

 

FEM

 

SKYWORKS

 

SKY13702-20

 

FEM

 

 

FEM

 

SKYWORKS

 

SKY13703-21

 

FEM

 

 

PAM

 

BROADCOM LTD (AVAGO)

 

AFEM-8050

 

PAM

 

 

PAM

 

BROADCOM LTD (AVAGO)

 

AFEM-8060

 

PAM

 

 

PAM

 

QORVO INC

 

RF6110

 

PAM

 

 

PAM

 

SKYWORKS

 

SKY77359

 

PAM

 

 

Battery

 

 

 

 

 

 

 

 

 

 

HUIZHOU DESAY

 

 

 

Li-Polymer, 3.8V, 1960mAh

 

$

2.50

 

 

 

 

 

 

 

 

 

BT / GNSS / WLAN

 

 

 

 

 

 

 

$

8.00

BT / WLAN

 

UNIVERSAL SCIENTIFIC INDUSTRIAL

 

S39S00201

 

BT / WLAN Module

 

 

GNSS

 

BROADCOM LTD

 

BCM47734IUBG

 

GNSS Receiver

 

 

Front End

 

 

 

 

 

BT / WLAN & GNSS Front End

 

 

Cameras

 

 

 

 

 

 

 

$

19.90

Front FaceTime

 

 

 

 

 

7MP BSI w/ Fixed Lens

 

 

Rear

 

 

 

 

 

12MP BSI, w/ AutoFocus, & Optical Image Stabilization

 

 

Display

 

 

 

 

 

 

 

$

43.00

Display / Touchscreen Module

 

 

 

 

 

4.7″ 1334×750 LTPS IPS LCD, w/ In-Cell Touch

 

 

Electromechanicals

 

 

 

 

 

 

 

$

16.70

Taptic Engine

 

 

 

 

 

Taptic Engine

 

 

Other Electro-Mechanicals

Antennas, Connectors, Microphones, PCBs, Speakers, etc.

 

 

 

 

 

 

 

 

 

 

Glue Logic

 

 

 

 

 

 

 

$

1.30

 

 

LATTICE SEMICONDUCTOR

 

ICE5LP4K-SWG36I

 

FPGA – iCE40 Ultra, 40nm

 

 

Mechanicals

 

 

 

 

 

 

 

$

18.20

Enclosure

 

 

 

 

 

Enclosure, Main, Bottom – Machined Aluminum

 

 

Other Mechanicals

 

 

 

 

 

Hardware, Labels, Insulators, Shielding, vents, etc.

 

 

Memory

 

 

 

 

 

 

 

$

16.40

NAND

 

SK HYNIX

 

H23QEG8VG2ACS-BC

 

32GB NAND

 

 

SDRAM

 

SAMSUNG SEMICONDUCTOR

 

K3RG1G10CM-YGCH

 

2GB LPDDR4 PoP

 

 

Power Management

 

 

 

 

 

 

 

$

7.20

PMIC – Main

 

DIALOG SEMICONDUCTOR

 

338S00225

 

PMIC – Main

 

 

PMIC – RF

 

INTEL

 

PMB6826

 

PMIC – RF

 

 

Others

 

 

 

 

 

Other PMICs, Transistors, Diodes, etc.

 

 

User Interface

 

 

 

 

 

 

 

$

14.00

Audio codec

 

CIRRUS LOGIC

 

CS42L71

 

Audio Codec

 

 

Audio Amplifier

 

CIRRUS LOGIC

 

338S00220

 

Audio Amplifier (Qty:3)

 

 

NFC

 

NXP

 

PN67V

 

NFC Controller

 

 

Others

 

 

 

 

 

Interface Ics, discretes, passives, etc.

 

 

Sensors

 

 

 

 

 

 

 

 

Barometer

 

BOSCH SENSORTEC GMBH

 

 

 

Barometric Pressure Sensor

 

 

e-compass

 

ALPS

 

 

 

Electronic Compass

 

 

Other Sensors

 

 

 

 

 

Accelerometer, Gyroscope, Touch ID Fingerprint

sensor,

ALS/Proximity sensor, etc.

 

 

 

 

 

 

 

 

 

 

Box Contents

 

 

 

 

 

 

 

$

11.80

Lightning Cable

 

 

 

 

 

USB to Lightning

 

 

Lightning to 3.5mm Audio Adapter

 

 

 

 

 

Audio Adapter, Lightning to 3.5mm Jack

 

 

Headset w/ Lightning Connector

 

 

 

 

 

Headset, Stereo, w/ Lightning Connector

 

 

Charger

 

 

 

 

 

Wall to USB Type A Jack, 5V, 1A

 

 

Boxes and Literatures

 

 

 

 

 

 

 

 

 

© 2016 IHS Markit. All Rights Reserved.

 

About IHS Markit (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a world leader in critical information,

analytics and expertise to forge solutions for the major industries and

markets that drive economies worldwide. The company delivers

next-generation information, analytics and solutions to customers in

business, finance and government, improving their operational efficiency

and providing deep insights that lead to well-informed, confident

decisions. IHS Markit has more than 50,000 key business and government

customers, including 85 percent of the Fortune Global 500 and the

world’s leading financial institutions. Headquartered in London, IHS

Markit is committed to sustainable, profitable growth.

IHS Markit is a registered trademark of IHS Markit Ltd. All other

company and product names may be trademarks of their respective owners ©

2016 IHS Markit Ltd. All rights reserved.

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iPhone 7 Materials Costs Higher Than Previous Versions, IHS Markit Teardown Reveals

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