iSuppli: iPhone 3G costs $173 to make

iSuppli: iPhone 3G costs $173 to make

Summary: An article at Business Week states that the forthcoming iPhone 3G costs Apple approximately US$173 to manufacture.The estimate is based on its Bill of Materials (BOM) according to a preliminary “virtual teardown” conducted by iSuppli Corp.

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iSuppli: iPhone 3G costs $173 to makeAn article at Business Week states that the forthcoming iPhone 3G costs Apple approximately US$173 to manufacture.

The estimate is based on its Bill of Materials (BOM) according to a preliminary “virtual teardown” conducted by iSuppli Corp.

“At a hardware BOM and manufacturing cost of $173, the new iPhone is significantly less expensive to produce than the first-generation product, despite major improvements in the product’s functionality and unique usability, due to the addition of 3G communications,” said Dr. Jagdish Rebello, director and principal analyst for iSuppli. “The original 8Gbyte iPhone carried a cost of $226 after component price reductions, giving the new product a 23 percent hardware cost reduction due to component price declines.”

Insanely Great Mac estimates that AT&T will subsidize about US$499 for each device making Apple's per-unit profit on an 8GB iPhone US$281 after royalties, or about 56 percent, which is inline with the first generation handset.

If you're a component/chip geek, the Business Week piece is a fantastic read.

Topics: Wi-Fi, Hardware, iPhone, Mobility, Networking

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4 comments
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  • Unlikely we'll see unlocked iPhones

    Since Apple is depending on mobile phone networks selling the phone at a loss which is recovered by selling services, it is unlikely that unlocked iPhones will be available in all the new countries touted by the Steve.
    Fred Fredrickson
  • iPhone 3G costs as litle as $100 to make....

    http://www.eetimes.com/rss/showArticle.jhtml?articleID=208403011

    The raw cost of materials to build the iPhone 3G could be nearly half that of the original model, according to Portelligent Inc. (Austin) that conducted a teardown analysis of the first handset. The first phone had a bill of materials estimated at $170 at launch, but the iPhone 3G could have a BOM as low as $100 when it debuts July 11, said David Carey, president of Portelligent, a division of TechInsights, the publisher of EE Times.

    Obviously, my source has the correct information?

    [i]Who are you going to trust, an engineer or some stupid business major? [b];-p[/b][/i]
    TheTruthGiver
  • Rectally extruded.

    iSuppli's numbers are just a guess. Until a real teardown is done, don't believe anything.
    Eriamjh
    • I'm not sure

      [i]Until a real teardown is done, don't believe anything.[/i]

      I'm not sure why it matters at all. It's interesting information, but in the end... consumers will buy it, and Apple and AT&T will make money (probably a lot of money).

      Unless of course you're trying to forecast next year's profits.
      Badgered