We've come to count on the folks over at iSuppli to breakdown the materials-n-labor cost of manufacturing the latest iPhone, and sure enough they've done it again. This time with some pretty noteworthy results.

Whereas last year's 4S cost $188 in parts, plus an $8 "manufacturing" (labor) fee, to bring to a total of $196 (for the 16GB model)—the iPhone 5 costs $199 in parts and $207 after the manufacturing fee. That means it is actually cheaper to buy the phone itself than it is to build the damn thing!


Yes, this is only assuming you're buying the 16GB model and are eligible for an upgrade (or starting a fresh contract with a new carrier), but still. $8 saved is a good thing. If only it didn't somehow seem like the $8 you could save is the very sum not getting into the hands of whichever Foxconn laborer calloused his/her fingers for your lovely new device.

Also worth mentioning: the 64GB model has gone down $16 in BOM+manufacturing cost—from $254 for the 4S to $238 for the 5, the major price jumps and discrepancies coming from the NAND flash memory. [iSuppli]


Update: All this being said, it's important to point out some very valid caveats: iSuppli bases its calculations on market prices, which are not necessarily the same as what Apple pays... because they're Apple and can negotiate. Also remember that certain sums are not factored in, in iSuppli's math: R&D, marketing, packaging, shipping, warranty claims.