Infineon, National, Balda and Samsung Score iPhone Design Wins, iSuppli
Teardown Reveals

Shipments to reach 4.5 million units in 2007, 30 million in 2011

El Segundo, Calif., Jun. 3, 2007 – In terms of cost, iSuppli Corp.’s
teardown analysis of Apple Inc.’s iPhone offered few surprises, with its
Bill-of-Materials (BoM) closely conforming with our preliminary functional
estimate issued in January. However, in terms of suppliers, the iPhone is
packed with surprises, with 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. –
according to iSuppli’s Teardown Analysis service.

“iSuppli’s teardown, conducted this weekend, determined that the 8Gbyte
version of the iPhone has a total hardware BoM and manufacturing cost of
$265.83, generating a margin in excess of 55 percent on each 8Gbyte iPhone
sold at the $599.00 retail price,” said Andrew Rassweiler, principal
analyst for iSuppli.
In January, before iPhones were available for physical teardown, iSuppli
estimated a $264.85 hardware BoM and manufacturing cost for the 8Gbyte
iPhone. Note that these costs do not include royalties and logistics
iPhone Semiconductor Winners
Infineon, a new supplier to the iPod family, was among the biggest winners
in terms of semiconductor content. 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.

National’s contribution to the iPhone BoM is relatively small, with its
lone chip in the product costing $1.50, which represents less than 1
percent of total product cost. However, the part – a serial display
interface – represents an important design win for National, which has
never had a part in an iPod. 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. This is a
significant win for National in a high-profile platform that is expected to
ship in large volume.

TPK Solutions (Balda) gets touch screen module, Epson gets display
One of the key features of the iPhone is the display, and the supplier for
the display module in the model torn down by iSuppli was Balda of Germany
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, Sharp and Toshiba Matsushita Display Technology Co. Ltd. The cost of
the unusually thin touch screen used in the iPhone is estimated at $24.50,
representing 9.8 percent of the 8Gbyte version’s costs.

Samsung scores again
Perhaps the biggest winner among the component suppliers for the iPhone was
Samsung. The South Korean electronics giant 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.
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 $14.00.

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.

Other winners
Other companies scoring design wins in the iPhone include:

* Wolfson, which continues to maintain its design win for the audio codec –
a notable achievement given the obvious challenge to maintain design wins
from generation to generation in the iPod family.

* CSR plc, which supplies the iPhone Bluetooth silicon costing $1.90.

* Marvell, which is contributing a Wi-Fi baseband chip costing $6.00.

The attached figure presents major components and suppliers in the iPhone.

iPhone outlook
Sales of the iPhone have kicked off with a bang, and iSuppli 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,
analyst, wireless communications, for iSuppli.

The figure attached presents iSuppli’s forecast of annual iPhone unit
shipments plus an exploded view diagram of iSuppli’s iPhone teardown.