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Apple rakes in massive profits with iPhone 5S worth $2 more than sub-$200 iPhone 5

Apple's new iPhone 5S costs $199 (£124) to manufacture, about $2 more than the previous-generation iPhone 5, according to IHS iSuppli.

The 16GB iPhone 5S carries a bill of materials of $191, while an $8 manufacturing cost brings it to $199, the group found in its teardown of Apple's new smartphone. The 32GB model lands at $208 (£129), while the 64GB is $218 (£135).

The most expensive part of the gadget remains the display and its touch-screen subsystem, at $41. That hasn't changed from the iPhone 5, with Japan Display Inc., LG Display, and Sharp producing them.

The phone's RF transceiver, which has been updated to support more 4G LTE bands, is the second most expensive component on the 5S. The $32 Qualcomm WTR1605L RF Transceiver supports up to seven simultaneous LTE connections, compared to the five available on the iPhone 5.

The new A7 processor, meanwhile, costs $19 - more expensive than the $13 A6 in the iPhone 5 and 5C. The 64-bit A7 is produced by Samsung, despite the two companies' continued rivalry. "This likely is because Samsung has a license to ARM's 64-bit core," IHS noted.

Memory in the iPhone 5S was updated to LPDDR3, which is "the first time that the IHS Teardown Analysis Service has identified this advanced type of DRAM in an electronic product," according to IHS, which speculated that it was necessary to support the A7. Not surprisingly, that makes it more expensive; LPDDR3 in the 5s is $11 compared to $9.50 for the LPDDR2 in the 5C.

The Touch ID fingerprint scanner in the 5S, meanwhile, almost doubles the user-interface costs; it's $15 in the new flagship but only $8 in the 5C.

The iPhone 5S is retailing SIM-free at £549 for the 16GB model, £629 for the 32GB variant and £709 for the 64GB iteration.