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January 19, 2007
The iTrouble with iSuppli's iPhone iTeardown iEstimate
iSuppli's iPhone (oh, all these darn "i"s) teardown estimate -- with its 50% margins -- is getting lots of play. And while it's interesting, people really do need to read to the end.With the Apple iPhone not expected to ship until mid 2007—and thus a teardown not possible until that time—iSuppli has made a preliminary estimate of costs based on available information.iSuppli is saying outright that this teardown differs from its other teardowns in that it never, you know, actually tore anything down. It didn't have an iPhone to analyze, so this is entirely speculation. Yes, it's fun speculation, but the estimates could be way, way off.
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They also seem to disregard any money coming over from Cingular. I've seen estimates as high as $300 per.
This estimate looks reasonable, although it seems to imply more discrete parts. I would assume they are using an integrated phone stack from TI or Mot or one of the other vendors. This would bundle the DSP/base-processor and probably Bluetooth and a number of other standard components/comms. Many of them also have an integrated LCD controller, although the use of MacOSX could affect what is usable. As to Andrew's comment, I do not see anything special about their LCD in terms of resolution or color or backlight. The touchscreen portion is also normal as far as one can tell - they just added some software to the driver to improve the false touch cases (including face pressed against it). LG has that in their new phone too (it is fairly easy to measure the cap change over a few clocks to see if a real touch).
As to processor, they presumably are using a Pentium/clone vs. ARM, since MacOS is not normally running on an ARM (and the OS needs a fair bit of processing power). So, the cost for that could be light, but an older AMD part would work at that price point (since all the other work would be done by the phone processors (DSP and ARM most likely).
I mapped the supply chain of the Apple iPhone yesterday, as part of a class I'm teaching at the Marriott School of Management at Brigham Young University.
The data I have is speculative but, if it's remotely close, the supply chain is complex and gives us an indication of what the cost structure might look like.
They've gone with an odd shape of LCD and odd resolution.
And from what I have heard, the touchscreen is coming from a new supplier with a new tech. My source could be wrong.
But guys! It's just a fracking PHONE.
You've just confirmed for me that the service isn't available until June 2007. What i was told in addition to that was it is FCC approved yet.
I for one found it quite risky if it were true for Apple to do a market launch on it before approval. I'm thinking it maybe just a formality that needs attending to or relations w/ the folks at FCC we strong enough to garner a verbal one.
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They don't call it a teardown -- don't put words in their mouth.
The "rockin' high end" touchscreen is spec'ed in detail in the estimate, down to the size and pixels per inch.
Things like contributions from Cingular, capitalilzed research and development, and the like are not taken into account by cost accountants in this kind of marginal parts and assembly estimate.
The Cingular contribution should be included when making a profitability assessment.
They blew the LCD and touchscreen. This thing is going to use some rockin' high end stuff.
The app processor looks light too.
Agreed, though I didn't formally write anything up.