Samsung, Infineon big players in iPhone

By Colleen Taylor, Contributing Editor -- Electronic News, 7/3/2007

In its iPhone teardown, iSuppli Corp. said it found that Apple Inc.'s first mobile phone offering holds a number of surprises underneath its sleek exterior.

According to the firm's analysis, newcomers Infineon Technologies AG, National Semiconductor Corp. and Balda providing key components in the product, along with established component makers like Samsung Electronics Co. Ltd.

iSuppli's said its teardown, conducted the weekend following the iPhone's June 29 release, determined that the 8GByte version of the iPhone has a total hardware bill of materials (BoM) and manufacturing cost of $265.83, generating a margin in excess of 55 percent on each 8GByte iPhone sold at the $599 retail price. These costs do not include royalties and logistics expenses, the firm said.

Infineon, a new supplier to the iPod family, was among the biggest winners in terms of semiconductor content, iSuppli said. The German semiconductor supplier contributed the digital baseband, radio-frequency transceiver and power-management devices, providing much of the core communications capability of the iPhone. Altogether, Infineon's silicon content accounted for $15.25 worth of the iPhone's BoM, representing 6.1 percent of the 8GByte version of the product's total cost, iSuppli reported.

National's contribution to the iPhone BoM is one serial display interface chip in the product costing $1.50, which represents less than 1 percent of total product cost. The chip, which connects the display to the graphics controller, uses National's Mobile Pixel Link standard, which the company has been attempting to promote for use in mobile devices. According to iSuppli, this chip is a significant win for National, which has never been included in an iPod.

The supplier for the display module in the model torn down by iSuppli was Germany-based Balda in association with its partner TPK Holding of China. The module costs an estimated $27, representing 10.8 percent of the 8GByte model's cost.

The iPhone's touch-screen display itself is supplied by multiple sources: Epson Imaging Devices Corp., Sharp Corp. and Toshiba Matsushita Display Technology Co. Ltd. The cost of the touch screen used in the iPhone is estimated at $24.50, representing 9.8 percent of the 8GByte version's costs.

Meanwhile, Samsung supplies the iPhone's applications processor, which includes an ARM RISC core. The processor costs $14.25 in both versions of the iPhone. The company also contributed the NAND flash memory and DRAM for the iPhone, iSuppli said. In the 4GByte version, Samsung has $24 worth of NAND flash, and $48 in the 8GByte version. For both versions, Samsung supplies 1Gbit of double data rate SDRAM worth $14.

In all, Samsung has $76.25 worth of semiconductor content in the 8GByte version of the iPhone, giving the company a 30.5 percent share of the product's hardware cost—the largest total of any single supplier, iSuppli said.

Other companies scoring design wins in the iPhone include: Wolfson, which supplies an audio codec as it does for the iPod; CSR plc, which supplies the iPhone Bluetooth silicon costing $1.90; and Marvell, which is contributing a Wi-Fi baseband chip costing $6.

iSuppli's findings largely confirm earlier speculation from another market research firm, FBR Research. In January, FBR provided estimates of the iPhone's component suppliers that turned out to largely be on target—with the exception of the touch screen technology supplier, which it estimated would be Broadcom Corp. 

As for the product itself, sales of the iPhone have "kicked off with a bang," iSuppli said. And the firm believes that this strong performance will continue. Shipments of iPhones are expected to amount to 4.5 million units this year, and will expand by a factor of nearly seven to reach more than 30 million by 2011, according to Tina Teng, an analyst of wireless communications for iSuppli.

It is not only Apple that has much at stake with the iPhone's market performance—the companies that made the chips included in the handset are likely to see major positive or negative growth, especially on Wall Street, in the coming months. For its part, Apple's stock has soared in the months leading up to the iPhone's debut; shares of Apple opened at a price of $122 this morning, more than double its opening price of $57.52 one year ago.

See our EDN guide to the iPhone for more on this device.