Teardown Reveals What Makes Apple iPhone 4 Tick

Published June 23, 2010

| Reuters

Apple's hot-selling next-generation iPhone sports chips from Samsung Electronics, Micron Technology and STMicroelectronics, according to an early teardown, or disassembly analysis by technology firm iFixit.

The well-reviewed iPhone 4 goes on sale on Thursday in five of the world's biggest economies -- China and its guarded telecoms sector being a notable exception -- and consumers hoping to score the device are expected to throng stores.

Apple moved 600,000 of the slimmer and better-equipped $199 iPhone 4 last week in its first day of pre-sales, a deluge of interest that jammed ordering systems and squeezed carrier partner AT&T's inventory.

But iFixit, one of the better-known among so-called teardown firms hired by clients to provide data and competitive intelligence, said it obtained one of the phones from a Silicon Valley employee who got it in the mail two days early, amid multiple Web reports of similar shipments ahead of time.

Samsung and Micron supplied flash memory, according to the subsequent teardown conducted in the California city of San Luis Obispo.

STMicro, Europe's top semiconductor maker, provided accelerometer and gyroscope chips used for orienting the phone, iFixit told Reuters.

Other suppliers included Apple mainstay Cirrus Logic and cellphone chip specialist Skyworks Solutions. Numonyx supplied chips to earlier versions, but was bought by Micron for $1.27 billion this year.

iFixit's Kyle Wiens, who travelled to Tokyo to try to be among the first to obtain the new phone, but ended up analyzing his colleagues' photographs on the internet, remarked on how no space within the iPhone had been wasted.

"This is so compact," he said. "In terms of internal design, they scrapped this completely and started over."

Apple doesn't disclose who makes the components that go into its smartphones, and suppliers -- including Toshiba, Infineon and Broadcom -- in previous versions, kept still for fear of angering the company.


Early demand for the iPhone 4 -- and the larger iPad launched in April -- has blown away expectations.

On Tuesday, Apple, which overtook Microsoft Corp to become the world's most valuable technology corporation, also surprised Wall Street by saying it had moved 3 million iPad tablet computers in 80 days, helping boost its shares.

But the iPhone is Apple's main growth driver and is expected to soon become its biggest source of revenue.

The fourth generation begins selling in the U.S., Japan, France, Germany and Britain this week but will be in 88 countries by September -- the company's fastest-ever global product roll-out.

Early reviews for the smartphone -- which sports a higher-resolution screen, about 40 percent more battery life, video chat via Wi-Fi, a gyroscope sensor for improved gaming and now some 225,000 downloadable applications -- were good.

Tech columnist Walt Mossberg, who tested it for a week, raved about the simple-to-use video chat and sharper display, but warned Apple had not fully addressed longstanding complaints about the inability to multi-task, or run applications simultaneously.

On Tuesday, Barclays Capital estimated Apple will move 8.1 million iPhones in the fiscal third quarter ending June 26, surging to 12.1 million in the fiscal fourth quarter as the iPhone 4 production chain accelerates to meet demand.

JP Morgan estimated 10 million iPhones will ship every quarter as the iPhone 4 takes hold, from around 8 million in the current quarter.

More than 50 million iPhones have been sold since the device, which revolutionized the smartphone industry with its content library and simplicity of use, debuted in 2007.

Wall Street expects the company to sell 8 million to 9 million units in the current quarter, which ends June 26, and as many as 10 million next quarter.

The company traditionally makes its gadgets difficult to take apart, but iFixit experts commented on their website on Wednesday that the iPhone 4 presented little difficulty.

There can be multiple suppliers even for one particular type of component, experts say. Investors rely on the likes of iFixit and iSuppli to crack open Apple devices to reveal suppliers and component prices. Such news can boost the shares of a component maker, particularly one new to the iPhone.

Shares of Cirrus Logic rose 10 percent on June 17 after the first-day sales blowout. Cirrus supplies chips for virtually all of Apple's gadgets and relies on the company for more than a third of its revenue.