[cpjr]

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.

The entry-level, 16Gbyte version of Apple Inc.’s 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 iSuppli’s 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

[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.....

[cpjr]

^Yes but your not buying millions of the parts either

Can we say "volume discount"

[mikerlx]

Reminds me of the expensive gym shoes costing $3.50 and selling for $100 a pair

[mazdaboi318]

lol^^^^

[L3G4L1Z3]

I made $176 for my iPhone 3GS =p

[r1994augusto]

Originally Posted by mikerlx

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

[southfrisco]

Originally Posted by mikerlx

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...

[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.

[Mes]

Originally Posted by 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.

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 !!

[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.

[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...

[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.

[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.

[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