How will Apple (AAPL) get away charging $199 for its new 3G iPhone when it launches next month? In part by getting wireless carriers to subsidise the phones by several hundreds of dollars. But also by cutting the cost of materials and manufacturing more than $50 per phone, according to an iSuppli report summarized by BusinessWeek.
The 3G iPhone doesn’t come out until July 11, so iSuppli hasn’t gotten its hands on one yet for a real teardown. But based on its educated guesses, Apple is spending about $173 for components and manufacturing for each 8-gigabyte 3G iPhone. That’s $53 less (23%) than they spent to build the original 8-gig iPhone.
[Assuming a $499 wholesale price and $45 in royalties,] Apple’s per-unit profit on an 8GB iPhone works out to about $281, or about 56%, in keeping with the percentage on other Apple products, iSuppli says. The figure doesn’t include other costs, including software development, shipping and distribution, packaging, and miscellaneous accessories included with each phone. Apple also pays fees to its Chinese manufacturing partner, Hon Hai Precision Industry.
How does iSuppli’s fantasy teardown compare to other estimates? Earlier this month, Portelligent estimated that Apple’s bill of materials for the 3G iPhone “could be as low as $100,” or 41% less than the $170 Portelligent says they spent for the old iPhone. But as far as we can tell, that doesn’t include manufacturing charges, so it’s not a one-to-one comparison to the iSuppli estimate.
Apple’s Gift To Google: Hungry Android Developers?
Will The iPhone’s Apps Store Kill The ‘Jailbreak’ Market? Maybe Not
How The New iPhone Is Already Changing The Mobile Industry: Cheaper Smartphones