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  • iPhone 3G[S] carries a $178.96 BOM says iSuppli
    The new 3G[S] has been ripped apart and a Bill of Materials (BOM) has been put together outlining individual parts and their cost to Apple.

    Interestingly the now "base" model 16gb version runs almost the same build cost as last years 3G. And although you would think for this reason and obvious "at first glance" conclusions that most internals have been kept from the previous 3G....that is actually not the case.

    Originally Posted by :
    The entry-level, 16Gbyte version of Apple Inc.ís new iPhone 3G S carries a BOM cost of $172.46 and a manufacturing expense of $6.50, for a total of $178.96," said Andrew Rassweiler, director and principal analyst, teardown services, for iSuppli. "This is slightly higher than iSuppliís estimate of $174.33 for the original 8Gbyte iPhone 3G based on pricing in July 2008. Although the retail price of the 16Gbyte iPhone 3G S is $199, the same as for the 8Gbyte version of the original iPhone 3G, the actual price of the phone paid by the service provider is considerably higher, reflecting the common wireless industry practice of subsidizing the upfront cost of a mobile phone and then making a profit on subscriptions.


    You also have to remember Apple's agreement with AT&T provides Apple with a tidy profit margin including dipping into service plan income.

    See the full iSuppli article here
    This article was originally published in forum thread: iPhone 3G[S] carries a $178.96 BOM says iSuppli started by cpjr View original post
    Comments 26 Comments
    1. Melech518's Avatar
      Melech518 -
      That's crazy considering we will still pay around that exact amout for a new LCD and digitizer when it breaks(it always drops and breaks) if we buy away from apple, and a whopping $250 from apple.....
    1. cpjr's Avatar
      cpjr -
      ^Yes but your not buying millions of the parts either

      Can we say "volume discount"
    1. mikerlx's Avatar
      mikerlx -
      Reminds me of the expensive gym shoes costing $3.50 and selling for $100 a pair
    1. mazdaboi318's Avatar
      mazdaboi318 -
      lol^^^^
    1. L3G4L1Z3's Avatar
      L3G4L1Z3 -
      I made $176 for my iPhone 3GS =p
    1. r1994augusto's Avatar
      r1994augusto -
      Quote Originally Posted by mikerlx View Post
      Reminds me of the expensive gym shoes costing $3.50 and selling for $100 a pair
      LMAO thats true and it appplies for all shoes in the market... low bom but high sell prices
    1. southfrisco's Avatar
      southfrisco -
      Quote Originally Posted by mikerlx View Post
      Reminds me of the expensive gym shoes costing $3.50 and selling for $100 a pair
      Pretty much lost it's sheen after Air Jordans. Market saturation and too many NBA players thinking they can sell them like Jordan (sorry no one touches Jordan).

      Make it rare and the price will jack up. Have you heard about the Star Trek limited editions of like 950 made in all? $900+ for those babies and you get to seal yourself as a lifetime trek geek...
    1. paul100's Avatar
      paul100 -
      No one does any business without any profit, and Apple is no exception. The only thing is their margin of profit differs with their partners, that's it.
    1. Mes's Avatar
      Mes -
      Quote Originally Posted by paul100 View Post
      No one does any business without any profit, and Apple is no exception. The only thing is their margin of profit differs with their partners, that's it.
      So true. I only wish they weren't so greedy. Hell, 20-30% profit is more than enough, but at 60+%, Apples margin is way above the 35-45% industry average.

      Of course it would be easy to include banks, oil companies, insurance companies (and a whole host of other businesses) in the greedy list. Banks are my biggest irritation. FREE money (have you checked you money market or CD rates? not to mention government bail-out). They should be taken out and hog-tied if they can't turn a profit !!
    1. LSZ33's Avatar
      LSZ33 -
      This BOM really shouldn't surprise anyone here. And because of the high demand, they're going to keep doing it. Especially the iPhone 3G S sold. Alot of people doubted they sell as many as they did in those three days and they doubled the amount of phones that was expected tosell.
    1. sziklassy's Avatar
      sziklassy -
      One thing people seem to forget is that these are the prices of the components. What about all of the assembly lines that put the phones together and package them? What about shipping? What about paying employees? All of this has to go into the overhead cost of production. Sure they can get these parts for this cheap. Even if we could do that, how many of us could buy all those parts and put a phone together? Also, what about the costs of developing the OS, updates, etc. The money it cost to produce the phone you have in your hand ends up being much more than $180 in the end...
    1. djjessejames's Avatar
      djjessejames -
      THE 32 GB R SELLING FOR 799.00 CND
      YOU CANT EVEN UPGRADE TO THE NEW ONE. YOU BUY THE NEW PHONE FLAT OUT AND HOPE TO SELL YER OLD 3g TO HELP WITH COST.
    1. Tru-Mann's Avatar
      Tru-Mann -
      I agree that high profits are an issue, but Apple isn't just paying for the device, they also pay for the advertising campaign (alongside AT&T). They are also charging us for the OS (developers), also shipping and handling and so on. So to be fair, lets say that Apple expenses for each iPhone are in the neighborhood of $260.00. Still they should have a 30 to 40% profit so the full price for the 3GS should be $433.00 at the most.
    1. jiggajuggawugga's Avatar
      jiggajuggawugga -
      I saw on the daily show that soda companys buy the amount of syrup needed to make a soda for 2 cents and sell it at movie theaters for $3.50
    1. xxzone's Avatar
      xxzone -
      I'd like to see numbers showing how many people got the discount pricing, and how many paid full price. That would put their numbers in a better perspective of how they sold out on release.
    1. qgshadow's Avatar
      qgshadow -
      wheres is the FM receiver?, in the description theres something about FM receiver
    1. Mista Brothason's Avatar
      Mista Brothason -
      That's f'd, in Canada to buy the iPhone 3GS 32 gb outright from Rogers Wireless it's $799!
    1. Bluprint's Avatar
      Bluprint -
      Quote Originally Posted by sziklassy View Post
      One thing people seem to forget is that these are the prices of the components. What about all of the assembly lines that put the phones together and package them? What about shipping? What about paying employees? All of this has to go into the overhead cost of production. Sure they can get these parts for this cheap. Even if we could do that, how many of us could buy all those parts and put a phone together? Also, what about the costs of developing the OS, updates, etc. The money it cost to produce the phone you have in your hand ends up being much more than $180 in the end...
      How is it that steve is the most overpayed CEO ever. Now explain how the price justifies when customers has to pay for the device + apple care + monthly service + mobile me + itunes + accessories (cable, power adapters, docks, etc) for every customer under att that's way over $2,000 per year (times a million people). And not to mention a lot of things like everyone that paid full price, and the owners who replaced their lost or broken iphones.
    1. jayson9's Avatar
      jayson9 -
      Quote Originally Posted by Bluprint View Post
      How is it that steve is the most overpayed CEO ever.
      Thats only because Bill is retired.....

      And like it was mentioned before, this is nothing new. As long as there are sheep, there will always be sheep herders.
    1. cpjr's Avatar
      cpjr -
      ^Its true. People like to complain about company's like Apple and their prices, procedures, etc and still continue to buy their products.