Each 3G iPhone estimated to cost Apple $173 to build; less than the original iPhone
Posted by: in General News
Market research firm iSuppli has just released an estimate of how much it will cost Apple to assemble the various components of a 3G iPhone and put them together in a factory.
Cost per 3G iPhone (eight gigabyte model): $173
Cost per original iPhone (eight gigabyte model): $226
From iSuppli:
With the second-generation iPhone, Apple is making a significant departure in its pricing strategy.
“The original 2G phone was sold at an unsubsidized price of $499,” Rebello noted. “However, at a retail price of $199 for the low-end 8Gbyte version of the new 3G model, wireless communications service carriers will be selling the product at a subsidized rate, using a common business model for the mobile-handset market. The size of the subsidy paid by the wireless carriers to Apple will be about $300 per iPhone, iSuppli estimates. This means that with subsidies from carriers, Apple will be selling the 8Mbyte version of the second-generation iPhone to carriers at an effective price of about $499 per unit, the same as the original product.”
Bottom line: Apple will likely enjoy a profit margin of better than 50 percent on the 3G iPhone. Nice work if you can get it.
Note that the materials and manufacturing cost estimates don’t include the cost of software development, shipping, packaging and so forth.
After the break, I’ve included iSuppli’s part-by-part estimate of the materials cost for the 3G iPhone.
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