iPhone 3GS - How Much Does It Cost to Produce?

[geemanaz]

How much do you think it costs Apple to manufacture the new iPhone 3GS? $199? $300? More?

iSuppli, a market research firm that dismantles new gadgets identifying the components and assembly costs, took apart the new 3GS, and based on what it found, the 16GB iPhone costs

$172.46 in parts, and $6.50 in manufacturing expense, total of $178.96.

Of course, Apple sells the iPhone to AT&T and their other international partners at a considerably higher price, which is common, and the carriers in turn subsidize the costs for the consumers by locking them into contracts with high monthly subscriptions.

The most expensive component it seems isnt the application processor, as you might think, its actually the 16GB NAND flash memory, which comes in at a whopping $24. Who gets that chunk? Toshiba. Although Apple has more than one provider for this memory. The application processor is actually the 4th most expensive item at $14.46, with the display module and touchscreen coming in 2nd and 3rd at $19.25 and $16

Even though the cost of assembly is similar on the 3GS to that of the 3G, remember that the processor speed is now 600 Mhz instead of 400 Mhz, Apple includes more memory, and adds a better camera for a similar price point.

Gotta love the ever so quick deterioration of tech prices! At this rate, I can see this phone selling for $99 next year, and the current 3G given away for free with a 2 year plan!

Or maybe thats just wishful thinking.

 

[SOV]

lol Yeap, they're making a killing.

 

[rokamortis]

While i do think Apple is doing well, remember that this estimate doesn't take the software development or R&D costs into account. Most smartphone companies don't update the software like Apple is does - all owners going back to the 2G get the 3.0 update for free.

 

[chobbs1]

Legal fees. Marketing. Updates. Patents, shipping, packaging. And more. It takes alot to keep apple going. The costs in the article were direct hard costs. There is much more to consider. Apple is making a nice profit. But they're not wasting that profit. When I pay for a product I expect the support for said product and Apple delivers. I also expect forward development, Apple delivers. I do beleive this device is worth every penny I paid. I would totally buy this phone again and I absolutely plan on buying the next one!!!

 

[ardoreal]

Legal fees. Marketing. Updates. Patents, shipping, packaging. And more. It takes alot to keep apple going. The costs in the article were direct hard costs. There is much more to consider. Apple is making a nice profit. But they're not wasting that profit. When I pay for a product I expect the support for said product and Apple delivers. I also expect forward development, Apple delivers. I do beleive this device is worth every penny I paid. I would totally buy this phone again and I absolutely plan on buying the next one!!!

That old adage "You get what you pay for". I am with you though, Apple's support and frenetic development with the iPhone as a platform makes it worthwhile.

Same could be said of the Mac, in that the Apple tax was something beyond the physical parts of the machine. A friend of mine had a laptop hardware issue and it took him a month to get it fixed. When my old Powerbook had a memory slot failure, when I dialed the tech support line I got two rings and then a human.

Two rings, and then the person who could actually help me, a real technician, answered the phone. She was very helpful and I ended up doing the ship-to-fix scenario and Apple footed the bill for overnight shipments both ways.

I think this applies very directly to what you're talking about costs. I had a Pre fail on me and I never did get the issue resolved. I jumped ship entirely and came to iPhoneland. I have had no issues, but I know that if I do, my past experience in dealing with Apple means it would probably be pleasant and with the least hassle possible.