Overview / Main Features
As if by clockwork, Apple announced the successor model to last year's very successful iPhone model dubbed iPhone 3G S on June 8th, 2009. The device launched into retail just 2 weeks after that announcement and was billed by Apple as the much improved iPhone that runs nearly "twice as fast'. Indeed, the improved applications processor by Samsung does give the 3GS the extra oomph and the ample SDRAM courtesy of the integrated Elpida package (very similar part to the one we just saw on the Palm Pre) helps in realizing the speed/performance bump. Aside from a new camera module and the inclusion of an electronic compass, there were only a few surprises in an otherwise unchanged mobile phone from the iPhone 3G (circa 2008).
Overall, the iPhone 3G S is an iterative improvement on the iPhone 3G handset release in 2008. The strategic changes and component selections were largely to improve the user experience that has come to be synonymous with the iPhone brand and extend their market leadership in the smartphone space.
High-end mobile phone and wireless data service consumers.
Per press releases, first release in the US (along with limited worldwide markets) on June 19th, 2009.
Pricing and Availability
Pricing - Apple worked with their network carrier partners to subsidize the cost of the iPhone 3G S handset. Depending on the carrier and the specific global iPhone 3G market, the device maybe partially or fully subsidized by the network carrier of choice. In the US, along with exclusive carrier partner AT&T, Apple is selling the handset for $199 and $299 (16 & 32GB respectively) only with a 2 year contract.
Availability - Global
For the purposes of this teardown analysis, we have assumed a lifetime production volume (both 16 & 32GB iPhone 3GS models) of 22.3M units over 1 year.
As a reminder, teardown volume production assumptions are primarily used for our cost analysis in terms of amortized NRE and tooling costs, especially for custom components specific to the model being analyzed (mechanical components especially). Unless assumed, volumes increment by an order of magnitude. Minor changes in volume (say 1 million vs. 2) rarely have a large net effect on our final analysis.
Main Cost Drivers (Representing ~74% of total materials cost)
$24 - Toshiba Semiconductor - TH58NV67D2ELA89 - Flash - NAND, 16GB, MLC
$19.25 - Display Module Value Line Item - 3.5" Diagonal, 16M Color TFT, 480 x 320 Pixels
$16 - Touchscreen Assembly - 2-Layer Glass, Painted, w/ Integral Flex PCB, & Board to Board Connector
$14.47 - Samsung Semiconductor - APL0298C05 - Application Processor - ARM Core, PoP
$13.02 - Infineon - PMB8878 - Baseband - HSDPA/WCDMA/EDGE, Dual ARM926 & ARM7Core
$9.35 - Camera Module Value Line Item - 3.15MP CMOS, 1/4" Format, Auto Focus Lens
$7.50 - Elpida - K2132C2PD-50-F - SDRAM - Mobile DDR, 2Gb, PoP (2 Dies)
$7.28 - Bluetooth / WLAN Module Value Line Item - WLAN IEEE802.11b/g, Bluetooth V2.1+EDR
$5.20 - Sony Energy Devices Corporation - US374169 - Battery Cell - Li-Ion Polymer, 3.7V, 1220mAh
$3.65 - Numonyx - MCP - 128Mb NOR Flash + 512Mb Mobile DDR
$3.32 - UniMicron Technology - 10-Layer - FR4/RCF HDI, 1+8+1, Lead-Free, Halogen-Free
$2.79 - Infineon - PMB6952 - RF Transceiver - Quad-Band GSM/EDGE, Tri-Band WCDMA/HSDPA, 130nm RF CMOS
Direct Material $170.80
Total BOM Cost $176.54
Why Isn't This the Total I saw in Your Press Release or Market Mover Teardown Report?
Because when we perform a high-level quick-turn analysis, we are operating on a condensed timeline under a different methodology from a complete finished teardown report.
We do our utmost at the time of issuing releases to be accurate on the major components that represent the bulk of the cost, while buffering our estimates and make them somewhat conservative for all the "unknowns" (components that aren't all fully counted or spec'ed). At such preliminary stages we have not completed our research or costed out all of the smaller components, or may not have had the time to examine all sub-assemblies in detail (charger, cable, etc.). Instead we focus our time on the most valuable components, and make budgetary assumptions for an amalgam of others. These budgetary assumptions are, in the final analysis, replaced with detailed totals summing the actual costs estimated at the component level by all iSuppli analysts.
Furthermore, as our analyses progress we learn new facts; perhaps we learn something new about a process geometry for a given chip, or we may revise volume assumptions, etc. as new information comes in. As a result, the final analysis has boiled down from our estimates of 2 weeks earlier (at the time of writing of this summary - 7/13/09) to the current figure which we feel reflects our most up to date cost methodologies and therefore should be comparable to other recent teardowns.
What Is Not Included in our Cost Analysis
The total materials and manufacturing costs reported in this analysis reflect ONLY the direct materials cost (from component vendors and assorted EMS providers), AND manufacturing with basic test. Not included in this analysis are costs above and beyond the material manufacture of the core device itself - cost of intellectual property, royalties and licensing fees (those not already included into the per component price), software, software loading and test, shipping, logistics marketing and other channel costs including not only EMS provider and the OEM's margin, but that of other resellers. Our cost analysis is meant to focus on those costs incurred in the manufacture of the core device and exceptionally in some circumstances the packaging and literature as well.
OEM/ODM/EMS Relationships / Manufacturing
Based on our knowledge, this unit was manufactured by Hon Hai Precision Industry Co., Ltd.
Country of Origin / Volume Assumptions
Based on markings, the unit was assembled in China. Furthermore, we have assumed that custom mechanicals (plastics, metals, etc.) were also sourced in China.
Country of origin assumptions relate directly to the associated cost of manufacturing, where calculated by iSuppli. In the cases of finished" sub-assemblies (such as the battery), we do not calculate internal manufacturing costs, but rather assess the market price of the finished product in which case country of origin assumptions may or may not have a direct effect on pricing.
Remember also that labor rates are applied directly only to hand inserted components and systems in our bill of materials, and although regional assumptions do, these new rates do not have a direct effect on our modeled calculations of placement costs for automated SMD assembly lines. "Auto" inserted components (such as SMT components) placement costs are calculated by an iSuppli algorithm which allocates a cost per component based on the size and pin count of the device. This calculation is affected by country or region of origin as well.
Design for Manufacturing / Device Complexity
The Apple iPhone 3G S features a total component count of 1073 components (excluding box contents), of which 165 were mechanical in nature. This component count represents a slight increase of approximately 50 parts over last years [iPhone 3G] model. Overall, the iPhone 3G design complexity places it near the high end of the complexity spectrum for mobile phones breaking the 1K count barrier. As typical, Apple used a larger than typical number of discrete logic in the iPhone 3G design along with various unique and exotic IC packages that contributed to the overall complexity.
Component counts have a direct bearing on the overall manufacturing cycle times and costs, and also can increase or decrease overall yields and re-work. Our calculations of manufacturing costs factor counts and more qualitative complexities in the design. The cost of manufacturing is also, to some extent, decreased in this case because of assumed labor rate applied for China.
Note that manual labor has a much smaller effect on auto-insertion assembly lines (for the Main PCB, for example), where manufacturing costs are much more capital equipment intensive and driven by these investment costs.
The major design changes from original iPhone 3G are:
- Upgraded Samsung Apps Processor & supporting memory
- 3 MP auto-focus camera
- Inclusion of an AKM electronic compass
- Broadcom Bluetooth / WLAN solution (replacing the Murata module in previous model)
Apple continues the use of the Infineon cellular radio design in the 3G S and remains one of a handful of holdouts within the industry that has not adopted a Qualcomm solution for an advanced 3G mobile handset.
Here is a summary of the major components used in the iPhone 3G design:
MPU / Memory
Application Processor - Samsung Semiconductor - APL0298C05 (PoP)
SDRAM - Elpida - K2132C2PD-50-F (PoP, 2 Dies)
Baseband IC - Infineon - PMB8878
Bluetooth / WLAN
Bluetooth/WLAN IC - Broadcom - BCM4325FKWBG
MCP - Numonyx (128Mb NOR Flash +512Mb Mobile DDR)
Flash (16GB) - Toshiba Semiconductor - TH58NV67D2ELA89
RF Transceiver - Infineon - PMB6952
FEM - Murata
Power Management IC (RF Function) - Infineon - PMB6820
Power Management IC (Applications Processor Function) - Dialog Semiconductor
Regulator - Maxim - MAX8839
Audio Codec -Cirrus Logic - CS42L61
Touchscreen Controller - Texas Instruments (Assumed)
Electronic Compass - AKM Semiconductor - AK8973
Accelerometer - ST Microelectronics - LIS331DLx
GPS Receiver - Infineon - PMB2525
PAM - TriQuint Semiconductor - TQM616035
PAM - TriQuint Semiconductor - TQM666032
PAM - TriQuint Semiconductor - TQM676031
PAM - Skyworks - SKY77340
Display Module - 3.5" Diagonal, 16M Color TFT, 480 x 320 Pixels
Touchscreen Assembly - 2-Layer Glass, Painted, w/ Integral Flex PCB, & Board to Board Connector
Camera Module - 3.15MP CMOS, 1/4" Format, Auto Focus Lens