Apple’s iPhone 4S might be its latest all-singing and all-dancing smartphone, and it might be made out of some rather nice looking glass and metal, but according to the latest tear-down report, the iPhone 4S costs Apple just $196 to produce.

This puts the iPhone 4S at just $0.49 more than its older sibling, the iPhone 4, despite the latest handset sporting a dual-core A5 CPU, a considerably more well-spec’ed 8 megapixel camera, and a CDMA/GSM chip.

According to IHS iSuppli’s numbers, and we’re not going to argue with them, the 16GB iPhone 4S costs just $196 to manufacture, while the 32GB runs at $215 and the 64GB $254. That’s a considerable mark-up considering the off-contract prices charged.

All three models of iPhone 4S are identical, as you would imagine, other than the differences in chips required to add the extra storage to the 32GB and 64GB models. This means that Apple can build the same phone and add different memory modules, a benefit also helped by the fact the iPhone 4S now comes with a CDMA/GSM chip and antenna built-in. With the iPhone 4, Apple needed to produce two distinct models in order to offer hardware for use on the two different wireless technologies.

Apple’s huge buying power will also be a factor in the low manufacturing cost. When you’re buying components in the huge numbers that Apple is, you tend to be able to cut pretty good deals with your suppliers. Interestingly, all three iPhones cost just $8 to have manufactured, and the box the whole thing comes in runs at $7. The cheapest component? That’ll be the battery. Maybe that’s why it doesn’t last very long then?!

It is worth noting that these prices are for hardware only, meaning there has been no consideration taken as to the costs of software and any licensing required.

A new company coming to the iPhone 4S is Hynix, who according to IHS, are now the suppliers of the NAND memory used in Apple’s handset. Considering the memory is one of the most, if not the most expensive part involved in making an iPhone, Hynix must be pleased to have gotten onto the cash train that is Apple’s iPhone.

(via GIGAOM)

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