/// Apple’s iPhone 4S Cracked Open, Money Spills Out

October 19, 2011  |  All Things Digital


From the outside, Apple’s iPhone 4S looks an awful lot like its predecessor, the iPhone 4. Apple fans and investors were initially so disappointed when the phone turned out not to be a more revolutionary iPhone 5, the company’s shares intially fell by more than $20 before recovering on Oct. 4, the day it was announced Inside, the phone is similar too, but there have been some important changes from one generation to the next that have important implications for Apple’s many suppliers. According to a teardown analysis conducted by the research firm IHS iSuppli, chipmaker Intel, which last year acquired the wireless operations of the German chip concern Infineon , has been almost entirely bounced out of the 4S in favor of a set of chips from Qualcomm. The shift to Qualcomm had been rumored as far back as last September . Before Intel acquired its wireless unit, Infineon had previously supplied Apple with a chip known as a baseband processor that Apple had used in combination with chips from from Skyworks and Triquint to work with wireless phone networks. “Qualcomm is the big winner here,” says Andrew Rassweiler, an analyst with IHS iSuppli who conducted the teardown. “It is selling Apple a whole suite of chips that adds up to about $14 to $15 per iPhone.” Intel spent $1.4 billion to acquire Infineon’s wireless chip operations last year in a move seen as meant to shore up its presence in the wireless phone industry overall. It has struggled to win business for its Atom line of microprocessors, which are aimed at mobile devices like smart phones and tablets. Infineon still has a small chip in the iPhone, but Rassweiler says it’s far less significant and a lot less costly than the one it supplied Apple before. “It’s almost like Apple threw them a bone with a 50-cent part after they lost a much more high profile chip that cost about $10,” he says. Intel had no comment. ISuppli regularly conducts teardown studies of wireless phones and other consumer electronic devices in order to find out who a manufacturers vendors are — like most manufacturers, Apple prevents its suppliers from identifying themselves much as they’ve love to — but also what each part costs. The combined cost of components — analysts check on the list prices of each part — is known as a bill-of-materials (BOM) estimate that gives a fair idea how much a manufacturer, in this case Apple, makes in gross margin on each device sold. Apple doesn’t disclose its gross margin on a per-product basis but when it reported its quarterly results yesterday it said its overall gross margin was 40.3 percent

Continued here:
Apple’s iPhone 4S Cracked Open, Money Spills Out


Leave a Reply