isuppli
Latest
Apple taking risk with iPhone shortages
The iPhone broke sales records for Apple (1.7 million units sold by release day) and still had people lining up a week later. That's impressive, but according to one analyst it could have been even better. Shaw Wu of Kauffman Bros. believes that Apple could have sold between 2 million and 2.5 million iPhones had that many units been available. AppleInsider reports that he predicts Apple will sell 9 million iPhones in the June quarter and 40 million in 2010. In related news, iSuppli said this week that Apple's failure to meet demand could be an opportunity for other manufacturers, as frustrated would-be iPhone owners give up. "Consumers, questioning Apple's supply chain management capability, have started to look for alternative devices," wrote Tina Teng, senior analyst for wireless communications at iSuppli. Sure, some potential customers might abandon the iPhone in frustration, but enough to make a significant dent in Apple's bottom line? I doubt it. Those who really want one will eventually buy. If people are willing to stand in a sweltering line for 10 hours, a few weeks of waiting in a comfortably air-conditioned house is no biggie.
iSuppli: iPhone 4 parts cost $187.51
Update: As pointed out below, our original analysis here did not highlight the difference between the subsidized pricing (what consumers pay with a 2-year contract) and the much higher unsubsidized price (what carriers pay Apple for each phone). The unsubsidized price of the 16 GB iPhone 4 is not disclosed by Apple but is likely to be about $599, the same as the original pricing on the 3GS. iSuppli's pricing methodology has been criticized in the past for inaccuracy. We apologize for the error. iSuppli has done its usual thing with the16GB iPhone 4's components, calculating the raw cost of each of them, and the total comes to: US$187.51. The most expensive thing in the phone is the retina display screen, which is supposedly running Apple $28.50 per unit. The A4 processor adds $10.75 to the unit price, and the gyroscope adds $2.60, as compared to the accelerometer's estimated 65 cent cost. You may remember that the iPhone 3GS was estimated to have components costing $179 last year at release -- the price on those parts has dropped to $134, even though the phone itself is being sold at $99 (but Apple is probably just selling off inventory -- an unsold phone isn't worth anything to them). [Since carrier subsidies still hold for the 3GS, it's presumably still priced well above that number for the transaction between Apple and AT&T. –Ed.] The 3GS was also $199 at launch [presumably $599 unsubsidized], which means that Apple is making $10 less per phone with the iPhone 4, but maybe they're making up the costs elsewhere, maybe in advertising or R&D. Of course, these are all estimates -- there are all sorts of other factors going into this cost equation, both internally at Apple and in the manufacturing industry. But iSuppli has been doing this for a while now, and if they say the screen is the priciest component in your new iPhone, they're probably right. [via BGR]
Apple moves past Motorola, up to 3% global cell phone market share
Android may be moving ahead of Apple in the smartphone OS market, but Apple is steadily moving up the handset chart. It's just overtaken Motorola, shipping 8.75 million handsets in the first three months of this year, according to iSuppli. That many phones sets Apple up for three percent of the entire global market; that's a pretty amazing achievement for just the few years it's been in the business. Motorola sold 8.5 million handsets in the same time period, dropping it to number eight on the list while Apple moved up to number six. Who's still above Apple? RIM is the next target with their BlackBerry devices selling 10.4 million units. Sony, LG, Samsung, and then Nokia fill out the top five. The year-over-year growth tells the real story, though: while most of the top five, with the exception of Sony Ericsson, are showing positive growth from last year, Apple leads the pack with a whopping 130.7% growth. When you compare that to Motorola's -42.2% drop-off, it's clear why the two smartphone manufacturers are heading in different directions. Farther down on the list, you can see why China is such an important market for Apple in the next few years; China's TCL Alcatel is also making its way up in the rankings, and it's claiming 160.7% year-over-year growth. If Apple is going to continue the kind of growth it's had over the last year, growing foreign markets like that will be more and more important.
iSuppli finds worldwide cellphone shipments are up 13.8 percent, Motorola's share slipping
We've already seen Motorola's market share slip a bit when it comes to US cellphone shipments, and it looks like the news is even worse for the company on a global scale. According to iSuppli's latest numbers -- which back up some earlier reports -- while worldwide cellphone shipments rose a healthy 13.8 percent in the first quarter of 2010, Motorola slipped from sixth to eighth spot in the global rankings, selling a total of 8.5 million phones compared to 14.7 million during the same period a year earlier. As you can see in the helpful chart above (with sales indicated in thousands), Motorola's loss came largely at the expense of considerable gains from market leaders Nokia and Samsung, with LG, RIM and Apple also seeing some smaller but significant gains. And, yes, this news also means that Motorola is also now in a neck and neck race with ZTE, for what it's worth. [Thanks, Katie]
iPad component cost re-estimated
Now that the iPad is actually out and we know what's in it, iSuppli has adjusted its guesstimate for the actual price of the hardware to US$259.60. That's significantly more than the original estimate that was made a while back; iSuppli says that the iPad uses more silicon chips than expected, including three separate chips to control the touchscreen itself. That price is the 16GB Wi-Fi model (that retails for $500); the higher memory models obviously cost more (up to $348.10 for the 64GB Wi-Fi model). Still, Apple is making a solid profit on the per-unit price. There's no question that the iPad will make money no matter what, but there are tons and tons of other factors to include in this. On the flip side of the equation, this price doesn't include shipping out iPads to all of Apple's various stores, money to pay employees, and of course, all of the backend software and hardware design that went into actually creating these devices in the first place. Of course, in terms of profit, the price that you pay for the device at checkout is just the beginning; there's a lot of money also flowing over the App Store, and in iBooks and so on. Just looking at the hardware costs won't get you very far. Apple has money moving all over the place around this device.
iSuppli pegs iPad component costs at as little as $259.60
This shouldn't come as a shock to anyone: just because Apple's touting the "magical" $499 pricepoint of the iPad doesn't mean they're selling it at a loss. After carefully poring over the iPad's internals, iSuppli has waved its hands in the air and added up a thoroughly guesstimated bill of materials as low as $259.60 for the 16GB iPad, including $95 for screen and $26.80 for the A4 processor. Sure, we suppose we can believe that, although that number doesn't really explina the final price tag, since it fails to include include gigantic costs like, oh, say, "development." The good news for us is that there's actually a lot more complexity inside the iPad than iSuppli was expecting, and that means the raw component prices might come down over time as things like the three-chip touchscreen controller get simplified over time. What might seem silly and wasteful at $499 could seem all-too-tempting at $299.
iPhone gross profit margins nearly 60%
Bernstein Research's Toni Sacconaghi issued a 13-page report last week in which he estimated that the iPhone's gross profit margins were an astounding 57.8%. Those margins tower above Apple's competitors with RIM estimated to have 43% profit margins, Nokia 33%, Motorola 32%, and HTC 31.7%. Sacconaghi believes that the iPhone's high gross margins could change Apple's business model as the iPhone's share of Apple's overall revenue stream grows from 30% in FY09 to an estimated 45% to 50% in FY11. Philip Elmer-DeWitt over at Apple 2.0 notes that while the Street generally assumes Apple's profit margins will decline over the next few years, Sacconaghi believes they will increase due to a few key points: iPhone prices are actually increasing. In Q3 2009, the average wholesale price was $588. In Q1 2010 it's risen to $638. Buyers are still more than eager for the iPhone. There is no sign of price resistance from either customers or carriers. Mobile partners are still lining up to get the iPhone with Apple adding 15 new ones over the past 4 months. Despite his Rosy outlook, Sacconaghi is reducing his iPhone shipment estimates by 1.3 million units in FQ4 10 and 5.5 million units in fiscal year 2011 under the assumption that there won't be an iPhone for Verizon before mid 2011. He also expects T-Mobile will get the iPhone before Verizon does. As for the iPad, Sacconaghi estimates its gross profit margins to be between 30 to 32%, not the 50% suggested by iSuppli. Sacconaghi rates AAPL as "Outperform" and has a price target of $250. In his report he states, "We believe that on a cash flow basis the stock is very attractively valued and that the stock is the most attractive secular name in our coverage universe."
Droid more valuable than Nexus One or iPhone 3GS according to iSuppli
Ah, here we go again: another report from iSuppli breaking down the bill of materials (BOM) for one of our favorite smartphones. This time it's the Droid / Milestone under scrutiny, Motorola's beefcake slider that currently sells for $560 month-to-month on Verizon ($199 on contract). According to iSuppli's analysis, Droid brings a $187.75 bill of materials that breaks down into $179.11 worth of components and $8.64 in manufacturing costs. Naturally, the BOM does not include licensing fees, software costs, accessories, or the massive outlay this device has received in advertising support. Nevertheless, it makes for interesting apples-to-apples fodder when comparing costs with the Nexus One ($174.15 in materials only), iPhone 3GS ($178.96 materials and manufacturing), and original Palm Pre ($138 materials and manufacturing). The single most expensive component on the Droid is the 16GB removable microSD card ($35) bundled with the Droid. And after a controversial MOTO report that demonstrated a lackluster capacitive touchscreen on the Droid, it's interesting to compare the Droid's 3.7-inch TFT LCD ($17.75) and capacitive touchscreen overlay ($17.50) with that of the iPhone 3GS ($19.25 spent on a smaller 3.5-inch LCD and cheaper $16 touchscreen overlay) and Nexus One (whopping $23.50 for 3.7-inch AM-OLED display and $17.50 for the touchscreen assembly). Rounding out the top-end costs are the Droid's 5 megapixel autofocus CMOS sensor ($14.25), Qualcomm baseband processor / RF chip ($14.04), and TI application processor ($12.90).
Nexus One hardware costs $174.15, US multitouch still priceless
If, while perusing the Nexus One teardown, you were doing a mental tally of just how much each internal part may cost, here's your chance to compare your numbers to some professionally obtained figures. iSuppli reports a preliminary estimate of $174.15 for the cost of materials needed to build each handset. The research firm also congratulates Google on keeping a bill of materials comparable to most recent smartphones while having "the most advanced features of any smart phone ever dissected by iSuppli's Teardown Analysis Service." Costliest of all things was the 1GHz Snapdragon ($30.50), followed by the AMOLED display ($23.50) and memory ($20.40) from Samsung. The Bluetooth and 802.11n WiFi transceiver cost $8.20, and perhaps the most egregious spend was $12.50 on a 5 megapixel camera that many of us might never use. Hilariously enough, Google has spent $17.50 on what is clearly identified as a "capacitive multitouch touchscreen assembly" from Synaptics, though enabling it clearly remains a bridge too far.
Sony still loses about $40 on every PS3 Slim sold
"It Only Does Everything" Well, except make money. Three years after the launch of the original PS3, Sony has yet to profit from the hardware. It's getting close, though. The redesigned slim PlayStation 3 is smaller -- and thanks to the passage of time -- much cheaper to manufacture than the launch models, which lost Sony over $200 with each unit sold. According to iSuppli's teardown analysis, a current PS3 system costs $336.27 to make, about $500 cheaper than the first batch of consoles. With the system retailing for $300, Sony is still incurring at least a $40 loss per system, when you account for marketing and other additional costs. (This also means that Sony lost about $17.6 million over Black Friday week on PS3 hardware sales.) The single most expensive component to the system is still Sony's proprietary Blu-ray disc drive, which is estimated to cost about $66 to make. Other components have dropped significantly in price thanks to a switch from 65nm conductors to 45nm. The end result is a far more power-efficient system that requires less power and cooling technologies. "In light of these factors, the PlayStation 3 probably is already at or near the tipping point for profitability," iSuppli's Andrew Rassweiler added. So, if for some reason you need Sony Corp to lose money, you better rush and buy a PS3 now before they make those things profitable! [Via CNET]
VIZIO keeps the LCD TV crown in Q2, but Samsung is closing
Injunctions, hail, sleet or snow, VIZIO kept shipping its LCD HDTVs in large amounts during the second quarter, enough of them to account for 21.7% of the market, according to iSuppli. That was enough to narrowly hold off Samsung, which saw its numbers rise sharply from 17.8% in the previous quarter to 21.3%, reportedly due to its introduction and marketing of new LED sets, which contributed to 2.2 percent of all LCDs sold during the period. The analysts also see a growing trend of customers coming back for their second flat panel television to replace an older one, just the kind of people it thinks might gravitate towards features like skinny, power efficient LED designs. We'll see if that's enough to swing the balance Samsung's way, or if customers stick with VIZIO's approach.Read - VIZIO Again Ranked #1 in U.S. LCD HDTV ShipmentsRead - Samsung Cuts Into Vizio's Lead in U.S. LCD TV Market in Second Quarter
Energy Star 3.0 regulations set to impact TV designs
If you thought there was a row over the Energy Star 3.0 requirements for TVs, you haven't seen anything yet. Research firm iSuppli rightfully calls out some challenges for even the energy-miserly LCD TVs to duck under the numbers in the draft version of the Tier 2 (effective 2010) and Tier 3 (effective 2012) versions of the standard. For example, a 50-inch TV will have do limbo underneath a 153-Watt peak for Tier 2 compliance and 108-Watts for Tier 3. We're confident that some clever engineering will allow LCD to reach those figures; the real impact might be on plasma TVs, however. It pains us to say it, but plasma's going to have a hard time making that grade; of course, that's assuming that plasma TVs are still being made and marketed towards consumers who value the Energy Star label. For those of us who want efficiency and ultimate image quality, it's time to pull for LED-backlit LCDs. Read - Energy Star TV requirements draft [Warning: PDF link] Read - iSuppli predicts change in LCD design
iSuppli estimates the iPhone 3GS costs $179 to make
Did you know that after it is broken down into all of its composite metals and materials and parts, your human body is really only worth about $4.50? Yup, you're cheap in the broadest sense -- all of that oxygen, magnesium, iron, and sodium isn't actually worth all that much in the rare metals market. In fact, according to iSuppli, you're worth way less than the iPhone 3GS -- they looked at the component parts for Apple's new handset, and calculated its raw value at around $178.96. The most expensive components are the 16gb flash memory (ringing in at around $25 per part) and the display (at $19), all the way down to the audio codec board, which Apple reportedly picked up for a cheap $1.15. Of course, there was lots more cheaper stuff (we assume the screws weren't a buck each), but iSuppli didn't actually go that granular. That also doesn't include any of the non-hardware costs: shipping fees, R&D, distribution, marketing, and so on. But it's way more than you're worth, and it's $40 more than the Palm Pre costs to make, too.Lest you start worrying that your spouse will start valuing their iPhone more than your body, however, there is a silver lining. If you break down to the mineral components of the human body, we're cheap, but the actual components of the body are pretty expensive, it turns out. Expensive to the tune of $45 million, if you count up all the money you could pick up from taking out your bone marrow, extracting your DNA, and selling off a lung or two. Just like the iPhone's parts, when assembled, are worth more than iSuppli's $179, you too pick up some value when assembled the right way.[via Engadget]
iPhone 3GS: $179 to build says iSuppli
iSuppli's just released its estimated cost of Apple's newest offering, the iPhone 3GS. Total costs for the 16GB model costs $178.96 to manufacture, according to them -- give or take $4.63 more than the 8GB iPhone 3G estimate from last year. It's also about $40 more than iSuppli's most recent manufacturing estimate for the Palm Pre. The estimate covers only materials, and doesn't take into account various costs such as shipping and distribution, packaging, royalty fees or all the miscellaneous accessories included with each handset. Regardless, it definitely looks like Apple's managed to step up the innards of the phone without a significant bump in costs.
iSuppli sees TV sales continuing to expand despite the economy, Samsung keeps the overall lead
Even the economy can't keep HDTV sales down, according to iSuppli's research. In lieu of travel and going out, we're buying bigger TVs to stay home and watch, with sales of flat panel displays in the $600 - $999 range rising the fastest, while Wal-mart is very close to catching Best Buy in marketshare. Samsung's plasma sales kept it narrowly in the overall lead over upstart (and new LCD champ) Vizio, but we'll have to wait and see how long that lasts.[Via Yahoo Tech]
Palm Pre: $138 to build according to iSuppli
With the economy in the tank (still) and the heat on, cost and profit margins are more important than ever to companies hoping to stave off the inevitable, apocalyptic doom of recession. Well, iSuppli's released an estimated report of how much its costing Palm to cobble together the Pre -- about $138, as it turns out. iSuppli has positively identified just two of the Pre's suppliers thus far -- that Texas Instruments OMAP chip, which runs Palm $11, and Qualcomm's wireless chip -- but they've formed a general picture of what's under the hood for the estimate. That price is about 46 percent of the $300 iSuppli suggests Palm will be charging Sprint for the Pre (a number that's completely unconfirmed at this point). To put it in perspective, the BlackBerry Storm costs about $203 to make and was sold for $199 initially, the G1 clocked in at $144, while the iPhone 3G costs Apple an estimated $174.33. Of course, we have no way of assessing the accuracy of the estimate yet, but if it's in the neighborhood of correct, Palm's profit margin should be pretty healthy.
iSuppli: $359 Kindle 2 costs $185 to build, Whispernet says shhh
Ever wonder how Amazon was able to bundle unlimited Whispernet (Sprint EVDO) with the Kindle 2? To start with, eBooks are small, really small in the context of digital media downloads (music, audio-books, movies) so there's little impact to the Sprint network. Kindle 2 is also sporting a pretty healthy markup to cover the data fees. After conducting its own teardown and analysis, iSuppli estimates that the Kindle 2 costs just $185.49 for materials and manufacturing. The estimate does not include the costs related to marketing, distribution, class-actions, or the pain you feel at having learned the true definition of free. Full press release after the break.
$22 iPod Shuffle shocker: components tiny, inexpensive
When iSuppli recently reported that the parts and packaging of the iPod Shuffle 3G cost only $21.77, a mere twenty-eight percent of the unit's retail price, PMP Today asked a most reasonable question: Where are the new Shuffle KIRFs? According to Business Week, Samsung is making a killing on these things, supplying not only the unit's ARM-based processor ($5.98), but the storage ($6) on at least a few of the units as well. The lithium ion battery, described by iSuppli as "the smallest we've ever seen," has an asking price of $1.20. As for things like capacitors and resistors, they're being described as "about the size of a grain of salt" and cost fractions of a penny each. Of course, none of this takes into account things like paying engineers and designers, and royalties paid to patents owned by other companies. Not that the KIRFsters of Shenzhen worry about these sorts of things. Maybe the wherewithal required to produce a phony Shuffle is (for the time being) beyond the capabilities of the pirates? Or maybe they're just having too much fun cranking out NOKLAs.Read - iPod Shuffle 3G Costs $22 to Make: Where are the Clones?Read - Deconstructing Apple's Tiny iPod Shuffle
Intel rated leading chip manufacturer again, AMD slips out of top ten
This economic crisis has been tough for nearly every business worldwide, perhaps best evidenced by the number of corporate spats we've seen develop lately as everyone gets more and more protective of their respective turfs. While Intel and NVIDIA have lately been engaged in an epic war of PowerPoint presentations, fewer disputes have been bigger or longer-running than the one between Intel and its more direct competition, AMD. That "us inside" company just earned some bragging rights, being named the biggest processor manufacturer in the world again by iSuppli, with a 13.1 percent global market share. AMD, which came in tenth last year, dropped down to the number twelve position in 2008 after its revenue declined 7.8 percent compared to 2007. News was also bad for Texas Instruments, which dropped a position largely thanks to the success of mobile processors from Toshiba and Qualcomm. Don't be so glum, TI, maybe successes from Russell Crowe's favorite flavor of pico projector will make up for the difference.
iSuppli: BlackBerry Storm costs $4 more than its purchase price to build
In a fiscal climate where profit margin reigns intensely supreme, we've got yet another dollop of bad news to heap upon the parfait of pain that is the $199 (after $50 mail in rebate) BlackBerry Storm. Research firm, iSuppli, estimates that the cost for the components and assembly of RIM's BlackBerry Storm are just shy of $203 -- an estimate that does not include software development and uh, bug fixing costs or those attributed to patent licensing, physical distribution, marketing or anything else in the product lifecycle. The most costly component is the $35 Qualcomm MSM7600 processor that gives the Storm its dual GSM / CDMA personality. Now, $203 isn't that big of a spread compared to the per unit cost of a $175 8GB iPhone 3G, $169 BlackBerry Bold, or $144 T-Mobile G1. However, the lost prophets profits add up quickly when you've moved over a million units globally.P.S. We're not implying that RIM is losing money here (the price is obviously carrier subsidized), only that the Storm is likely less profitable than its peers. But without knowing what VZW pays on a per unit basis, we can't say for sure who's getting the fiscal-shaft.
