Research firm iSuppli has discovered the iPhone 3G costs just $174.33 in pure manufacturing costs, less than what it look to build the original first generation iPhone, according to an article that appeared on appleinsider.com.
In fact, according to iSuppli, the iPhone 3G cost Apple $53 less to manufacture than the last version of the iPhone, despite the inclusion of chips for 3G data and GPS capabilities.
The cost of materials does not include shipping the phone, selling it, or creating the software for it, but iSuppli said that the cheap design is part Apple’s short-term goal to establish a large market share early in the iPhone’s history, according to Apple Insider.
The new iPhone 3G has many of the same parts as the previous model, including the Samsung processor. Apple also saves money by using one durable circuit board versus the two tightly connected ones featured in the old iPhone, according to the article.
About $50 in licenses for patents and intellectual property is factored into the price, as well as an assumed unsubsidized cost of $499 for an 8GB model of the phone.
Apple, however, is thought to be getting as much as $300 in subsides from AT& T (the service provider for the iPhone in the United States) for every costumer that buys the device for the $199 price. That works out to about 55 per cent profit margin before accounting costs for marketing and software, according to Apple Insider.