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AAPL Stock: 103.29 ( + 0.79 )

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iPhone 3G geared for profit, not cutting-edge tech

updated 07:40 pm EDT, Tue July 15, 2008

iPhone 3G geared for gains

Despite the iPhone 3G's more modern wireless communication standards, arguably thinner design, and inclusion of GPS, its overall cost of manufacture has dropped just over $50, according to iSuppli. The company's Teardown Analysis Service reveals that the device is geared towards cutting costs, while increasing worldwide presence, rather than simply filling the iPhone with the latest and greatest. The iPhone 3G is assessed at $174.33, almost exactly the predicted $173 issued in June.

"The addition of 3G wireless capability represents an evolutionary design step for the iPhone, not a revolutionary one," said Andrew Rassweiler, teardown services manager and principal analyst at iSuppli. "iSuppli believes Apple aimed for a more cost-effective design for the 3G iPhone compared to the 2G, in order to lower the retail price--which will allow the company to seed adoption and to capture maximum market share now--while the company still has buzz and a perceived differentiation relative to its competitors."

iSuppli confirms that an Infineon AG chipset does power the unit, with Samsung, Marvell, and Cambridge also putting major components into the iPhone 3G. Cost and quality were optimized as Apple elected to use once circuit board for the phone, over the two that were previously used in the device, while also making use of a 10-layer board.

All things considered, iSuppli finds that overall, based on the selling price of the 8GB model, Apple stands to reap a margin of approximately 55-percent.




by MacNN Staff

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Comments

  1. Guest

    Joined: Dec 1969

    +3

    55% are you kidding me?

    Why don't these articles ever work in the cost of r&d, both hardware and software, the cost of actually supplying stock, or advertising dollars, where a c*** ton of money goes.

    Air Jordan's often sell for over $200 a pair, and the cost to make is about $20. But after marketing and endorsements, Nike only nets about $10 for a pair of shoes.

    Hardware costs alone never represent a companies total cost. Determining profit based on MSRP - manufacturing costs is broken and misinformed / misleading.

  1. sribe

    Joined: Dec 1969

    +1

    blinded by the obvious

    OH MY GOD, THESE GUYS DEDUCED THAT APPLE TRIED TO KEEP THE MANUFACTURING COST OF THE IPHONE DOWN IN ORDER TO MAKE A PROFIT! WHAT A BUNCH OF f****** GENIUSES! I AM TRULY IN AWE!

    not...

  1. LouZer

    Joined: Dec 1969

    0

    Re: 55%

    They don't because that's not what they're looking at. They look at the manufacturing cost of products. That's their purview.

    They can't look at anything else, because they'd need to know Apple's inside information about R&D and such.

    BTW, if they did try to include all that, it would be the same thing as MacNN posting up info about some Dell product nobody cares about that everyone whines on with "Why is this on MacNN".

  1. OtisWild

    Joined: Dec 1969

    +2

    2 boards to 1 = smart

    Nice to see reduction in parts, brings down power use and price, and improves durability.

    Ideally there'd be a software radio that could handle all the freqs and protocols in 1 chip with 1 antenna..

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