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Does mechanical & electro-mechanicals cover the machined steel band/antenna/frame? Because that's not cheap and it's a difficult material to work with. In one of the iPhone4 original videos, they had a multi-axis CNC going around outside and grinding/polishing it down, which was pretty impressive for a mass produced part.

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I think that you can count on that. A leading edge semiconductor plant is probably the most expensive factory you can buy. I think I have heard somewhere around $4b for a 28nm line +/- a tech node. Compare that to $0.5b for an automobile line with a bunch of multiple axis heavy duty CNC machines (I know, citation needed).

That's a good point. My thinking was chip prices are pretty well known and commotitized while Apple's manufacture of the case is a big unknown to iSupply and everyone else because it's completely custom and no one makes anything similar.

Chip prices change a lot depending on who you are (what you can negotiate and how much you want to buy). Apple is in a very special position as they have few products and a tendency to buy a part of their suppliers machines in exchange for guaranteed shipments and lower prices. The isupply table http://www.isuppli.com/Teardowns/News/Pages/iPhone-4-Carries... shows pretty different prices even for Apples own A4 which should have a flat factory cost. As for the mechanical components, I guess that the 10.80 figure is a decent guesstimate which could be off by +/- 50%.

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