The latest version of the iPhone 4 carries a BOM of $171.35, down from $187.51 for the previous model, based on a preliminary pricing estimate issued in June. When manufacturing expenses are added, the total production cost for the CDMA iPhone 4 amounts to $178.45.
“With the CDMA iPhone 4, Apple Inc. has shown once again that it never recycles a product design,” said Andrew Rassweiler, senior director, teardown services, for IHS. “Apple’s new designs always exhibit changes, evolution and optimization. This approach is evident not only in the antenna design but also in items like the integrated GPS functionality and the shrinking of the Wi-Fi/Bluetooth combo module. As we dig deeper into our teardown analysis, we’re certain that we will find a host of other tweaks all designed to improve quality but keep costs on a steady path of decline.”
The attached table presents the preliminary IHS iSuppli estimate of the bill of materials (BOM) and manufacturing costs of the CDMA iPhone 4. Please note that this cost assessment is preliminary in nature, and accounts only for hardware costs and does not take into consideration other expenses such as software, licensing, and royalties or other soft expenditures.
Just Don’t Design it that Way
One of the most significant changes is a redesign of the iPhone 4’s antenna.
The original iPhone 4 came under heavy criticism for signal integrity issues that occurred when users held the handset in certain ways.
The first version of the design featured an all-in-one approach combining global positioning system (GPS), Bluetooth and wireless local area network into one segment of the antenna superstructure that was integrated into the iPhone 4’s enclosure. The new version employs a separate Bluetooth/WLAN antenna.
“Apple has decided to isolate the Bluetooth/WLAN antenna from the enclosure/antenna assembly,” said Wayne Lam, senior analyst, competitive analysis at IHS. “This design change leaves the top enclosure antenna segment to serve primarily as the GPS antenna and probably also as a CDMA diversity receive antenna. The use of antenna diversity is significant because this scheme improves signal reception performance.”
The new CDMA iPhone 4 design also shows increased integration of semiconductor components through its use of Qualcomm Inc.’s MDM6600 baseband/RF transceiver, replacing the Infineon PMB9801 baseband chip used in the original universal mobile telecommunications system (UMTS)/global system for mobile communications (GSM) version of the smart phone. The Qualcomm part not only provides support for the CDMA air standard required to make the iPhone 4 compatible with Verizon Wireless’ 4G wireless network, it also integrates GPS control circuitry, which was supported by a separate chip—Broadcom Corp.’s BCM4750—in the previous version of the iPhone 4.
“By using the Qualcomm baseband chip that integrates GPS, Apple can go without the discrete Broadcom GPS device,” Rassweiler said.
In another example of optimization in the design, the CDMA iPhone 4 features a new revision of WLAN/Bluetooth module from Murata Manufacturing Co. Ltd. The module integrates Broadcom’s BCM4329 WLAN/Bluetooth/frequency modulation chip, which was in Murata’s module for the last iPhone 4 iteration.
“The Murata Wi-Fi combo module features the same core functional chip from Broadcom but has shrunk in size. Murata has years of experience with low temperature co-fired ceramic substrates into which passive components can be embedded, helping to keep overall module size small, and now even smaller.”
Beyond these changes, the CDMA iPhone 4 retains many of the same components seen in the previous-generation design.
Most notably, the design and supplier selection for the memory and the display subsystems—the two most expensive portions of the handset—appear to remain largely unchanged from the original iPhone 4, pending verification by the IHS teardown service’s continuing analysis.
At $40.40, the memory accounts for 23.6 percent of the total iPhone 4 CDMA BOM. The memory subsystem features 16GBytes of MLC NAND flash memory and 4Gbits of mobile double data rate (DDR) synchronous dynamic random access memory (SDRAM) from Samsung Semiconductor. The subsystem also includes additional memory chips from Toshiba Corp. contained in a multichip package (MCP).
The display/touch screen module represents the next most expensive subsystem, at $37.80, or 22.1 percent of the BOM. Just as in the original version of the iPhone 4, the display of the CDMA iPhone 4 employs a low-temperature polysilicon (LTPS) liquid crystal display (LCD) that features advanced in-plane switching (IPS) technology. The module is being manufactured by multiple sources, with LG Display and Toshiba Mobile Display supplying the majority, according to Vinita Jakhanwal, director for small and medium displays at IHS.
Skyworks v. TriQuint
The CDMA iPhone 4 includes two SKY77711-4 transmit modules from Skyworks Solution Inc. In the original iPhone 4 torn down by IHS iSuppli, transmit modules from TriQuint Semiconductor Inc. were identified. However, IHS believes that Apple was using both Skyworks and TriQuint as dual sources for the transmit modules in the original iPhone 4.
Furthermore, IHS believes that Apple continues to use the TriQuint parts in the original version of the iPhone 4.
Because of this, it may not be the design loss for TriQuint that it appears to be on the surface.
Find Out More > An Early Look Inside Apple's First CDMA iPhone