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Monday, Jun 16, 2008 1:55pm
iPhone 3G costs only $100 to manufacture
The iPhone 3G carries a lower price, but it also costs about half as much to make, according to a report in the EETimes. The report says tests by teardown specialist Portelligent put the bill of materials for the new model as low as $100. That should help offset the 3G’s lower $199 price point. Portelligent estimates that based on materials alone, Apple’s gross profit on the iPhone 3G totals about $99, compared to $229 for the previous version. Apparently, Apple is counting on sales volume to make up the difference and Apple may also be receiving a payut for each carrier activation, although the revenue sharing plan with carriers, as with the original device, is no longer in place.

Portelligent says the cost savings comes from a variety of areas, including a touch screen assembly which, at roughly $30, cost half that of the original iPhone. Additional costs associated with the 3G upgrade were more than offset by savings in memory, improvements in engineering and other areas, according to the EETimes.

The report also says the iPhone 3G uses the HSDPA version of W-CDMA, supporting a minimum of 1.5 Mbits per second, up to a maximum of 7.5Mbits/s. Will Strauss, President of Tempe, Az. based Forward Concepts, told the publication he believes Apple is using an infineon baseband and RF transceiver and a Samsung Applications processor, based on sources he would not name. Strauss says the the new iPhone uses a GPS chip from Infineon with technology licensed from the startup Global Locate, now owned by Broadcom.

"Gen2 iPhone pricing is aggressive enough that it made me think Apple's really taking the gloves off on this one," said said David Carey, president of Portelligent. "They are probably not as worried about iPhone hardware profits as they are about getting a piece of the action on service revenues and getting more Macs in homes and offices all around the globe,” he told EETimes. The iPhone 3G is scheduled to go on sale July 11th.