iPhone 3G build costs

Each unit of the iPhone 3G is costing Apple approximately $173 to assemble and manufacture, writes iSuppli. The research group says it has conducted a preliminary, "virtual" teardown of the phone, based mainly on arguments from internal experts on fields such as cellphones and wireless technology. If the estimate proves accurate it will represent a 23 percent decline in cost from the original 8GB iPhone, which took $226 to make. The reduction is attributed to a drop in the cost of individual parts.

Apple should in fact make a greater profit on the sales of 3G units, says iSuppli, even though the new devices will sell for as little as $199. This is because it believes carriers are paying Apple roughly $300 to subsidize each phone, maintaining or expanding on the margins of the 4GB, $499 iPhone Apple briefly produced. This margin should only expand over time, as the cost of manufacturing naturally declines. It is predicted to slide to $148 in 2009, and if the phone were left untouched, it would cost as little as $126 in 2012.

by MacNN Staff