iPhone 3G: lower price, more profit

June 25, 2008

Apple CEO Steve Jobs speaks about the new iPhone at the Apple Worldwide Developers ConferenceDon’t think that Apple’s executives are great humanitarians or just a bunch of really nice guys for cutting the price of the new iPhone in half. They are in it for the money — and they stand to make more and more of it with this second generation iPhone.

Research firm iSuppli “virtually” cracked open the 3G iPhone “using insights from our analysis staff to develop estimates of iPhone content, suppliers and costs.” (It plans to really deconstruct the phone when it is released on July 11.)

ISuppli concluded that each iPhone costs $173 to make. It will sell at retail at $199. When you tack on an estimated $300 Apple gets in subsidies from wireless carriers, that puts the value of each iPhone to Apple at about $500.

The similarly priced first-generation iPhone cost $256 — $226 after “component price reductions” — and sold for $499.

This is how iSuppli breaks down the iPhone it (virtually) broke down :

(The data does not include other costs, including software development, shipping and distribution, packaging, and miscellaneous accessories included with each phone, iSuppli says.)

(Source: iSuppli, Photo: Reuters)

One comment

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will you please provide me all the details of your new prelaunch IPHONE in india because I am very excited for bring this .

Harish Amla

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