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Comment by mtgx | Hacker News Reader

The link mentions a lower BOM for iPhone 4S, but it's important to note that this is the BOM for iPhone 4S right now, not when it launched. Obviously the cost of the components for iPhone 4S has lowered since a year ago.

The BOM for iPhone 4S and iPhone 4, at the moment of launch was $188, so more than the current iPhone 5. Sounds to me like Apple is skimping on what it can add to the new iPhone, and prefers the extra profit instead. Usually others have the cost of materials about half of the final retail price, and that helps with covering for R&D and other costs as well. Apple seems to have the BOM 1/4 of the retail price of $650.

http://www.isuppli.com/Teardowns/News/Pages/iPhone-4-Carries...

http://www.isuppli.com/Teardowns/News/Pages/iPhone-4S-Carrie...

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Apple doesn't strike me as a company to skimp on materials though. My initial assumption would have been that they struck better deals for sourcing materials and parts. They're in a damn good position to do that, so I don't see lower prices for what they need to be too far fetched.

First, I find these pre-teardown estimates and price guestimates to be completely misleading and uninformative. It's foolish to base any opinion on a guess using information that has not been confirmed in an even moderately rigorous manner. The sun doesn't revolve around the Earth despite opinions to the contrary.

Second, by your own admission component costs have declined. Why would you leap to the conclusion that Apple would be skimping purely on the price difference alone? Perhaps they are benefitting from the variety of factors that have caused component costs to be reduced during that time? It makes perfect sense to use today's prices to compare the component costs of the two devices, otherwise it's disingenuous unless all the factors that led to today's reduction in costs for the components in question are accounted for.

These numbers don't 'jive' to me. The iPhone5 has the touch panel built into the screen yet the category for "Touchscreen/Cover Glass" is actually higher on the iPhone 5 implying the glass on the 5 is actually more expensive than both the glass and the touch panel on the 4s ($7.50 vs $6.50). Compare that to the iSuppli BOM which had the iPhone 4s touch panel alone at $14 and the glass doesn't even make it on the major cost driver list.

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