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Monday, June 28, 2010, 10:00 am PT (01:00 pm ET)

Components of 16GB iPhone 4 estimated to cost Apple $188

A breakdown of the components that make up Apple's iPhone 4 has found that the most expensive item in the device is its high-resolution Retina Display, with an estimated price of $28.50.

As first reported by Businessweek, iSuppli's teardown of the iPhone 4 found that the components inside cost an estimated $187.51. Apple's latest phone starts at $199 with 16GB of internal memory and a two-year service contract in the U.S. The cost breakdown applies to the 16GB iPhone 4.

The most expensive component is the highly touted Retina Display found on the iPhone 4. Supplied by LG Display, the component costs $28.50, iSuppli said. The custom-built A4 processor, assembled by Samsung, cost an estimated $10.75.

The newly added gyroscope in the iPhone 4 was said to cost another $2.60, in addition to the 65-cent accelerometer found in the current phone as well as previous models. The new gyroscope is made by STMicroelectronics of Geneva.

Other suppliers of the internal hardware include touch-sensitive panels from Wintek and TPK, and chips from Skyworks Solutions and TriQuint Semiconductor.

Neither Apple nor its carrier partners would comment on how much is paid by wireless providers for the unsubsidized handset. Historically, the average selling price of previous model iPhones has been around $600.

The total estimated cost is slightly higher than the iPhone 3GS, first released last year. The 2009 handset cost an estimate $179 in parts for Apple.

In fact, the price of Apple's phones has been steadily increasing over the years. In 2008, iSuppli found that the iPhone 3G carried a components cost of $174.33.

TechCrunch notes in its coverage of the report that "iSuppli is well-known for low-balling these numbers in an effort to convince manufacturers to contact them in order to connect with their preferred suppliers, so grains of salt must be taken."