8GB iPhone only cost $220 to manufacture

[beachtrader]

http://www.businessweek.com/technology/content/jul2007/tc2007072_957316.htm

Portelligent estimates that the cost of the materials used in the iPhone add up to about $200 for the 4-gigabyte version, which sells for $499 and about $220 for the 8-gigabyte version, which sells for $599. Their estimate doesn't include costs of final assembly, but it does give some insight into the gross margin on the device. Historically Apple's gross margins have run ball park of 50% plus or minus a few points. "We had taken a speculative stab at what the costs would be back in January, when the phone was first announced and we were pretty close to the mark," Carey says (see BusinessWeek.com, 9/20/06

 

[davidra]

Not only doesn't it include assembly, it doesn't include R&D

 

[Certs]

220 is not cheap, for parts alone.

 

[Kupe#WP]

220 is not cheap, for parts alone.

No kidding. Considering factory labor can range from 25% to 100%+ of the cost of parts (depending on the product, workforce skill requirements, country of manufacture), the iPhone's overall margins seem lower than I would have thought.