Apple Set To Make Huge Profit On iPhone 5

Apple is set to make a massive profit on the iPhone 5, if the preliminary estimate by tear down specialists TechInsights is correct.

The company estimates that the total cost of materials for the 16GB version of the smartphone is $167.50 (£103.14), around £20 more than the iPhone 4S, which had a component bill of $132.50 (£81.60). With a retail price of £529 for an unlocked iPhone, that looks like up to £400 profit.

iPhone 5

The most expensive components are the new display and touchscreen, which cost a combined $22.50 (£15.62) and the brand new Apple A6 dual core processor which apparently sets Apple back $28 (£17.20). The processor is manufactured by Samsung and a recent benchmark appeared to validate Apple’s claims that the iPhone 5 will be twice as fast as any previous iDevice.

Pre-orders started last Friday and Apple has sold two million units so far, more than doubling the record set by the iPhone 4S nearly a year ago.

The Cupertino-based company is currently selling an unlocked 16GB iPhone 5 for £529, while operators are subsidising the cost to customers who take out lengthy 24 month contracts. In the UK, Vodafone is offering customers the device for £249 on a £25 a month contract or free with a plan that costs £47, while T-Mobile starts selling the iPhone 5 from £109 on a £36 contract.

The iPhone 5 was unveiled last week, boasting a larger screen, thinner form and support for Long Term Evolution networks. This includes the 4G network that will be launched by EE in the UK later this year.

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