New 3G iPhone costs $173 to make: iSuppli

The new iPhone costs just US$173 to make.

The mystery behind why the new iPhone is so cheap may be solved, with market researcher iSuppli saying it costs just US$173 to make.

Apple caused a stir earlier this month when it launched the new 3G (third generation mobile telecommunications) iPhone with a $199 price tag. Similar products from rivals cost much more. Taiwan's High Tech Computer (HTC), for example, has priced the Touch Diamond at NT$23,900 (AUD$795) for its home market, while Nokia estimates its new N96 smartphone will retail for Euro 550 (AUD$895).

All three handsets are due on store shelves soon.

There are two main reasons Apple can charge so little for the new iPhone, iSuppli said Tuesday. First, mobile phone service providers will subsidize the handsets by paying Apple about US$300 per unit, iSuppli estimates. The other reason is the low cost of materials going into the handset.

Apple did such a good job choosing components for the new 3G iPhone that it costs less to make than the old version, despite significant improvements, iSuppli said. The old iPhone cost $226 to make and did not include 3G nor GPS (global positioning system). Yet Apple sold the original iPhone for $499 initially.

The most expensive component on the 3G iPhone is the 8G bytes of NAND flash memory storage, at $22.80, followed by the touchscreen at $20, iSuppli estimates.

In all, the chips and other components in the handset add up to $164, and then iSuppli estimates Apple is paying another $9 for assembly of the device, for a total of $173.

Taiwan's Hon Hai Precision Industry, the world's largest contract electronics manufacturer, is making the new iPhone at factories in China.

The market researcher calls its estimate a preliminary one based on a "virtual teardown" of the new iPhone. The estimate is based on information available about the new handset. Once the 3G iPhone is on the market, iSuppli plans to open one up to figure out the make and model of each component inside, to more exactly determine the cost of the handset.

The initial estimate also does not include the cost of software development, shipping, distribution, packaging and accessories included with each iPhone.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Dan Nystedt

IDG News Service

Comments

Comments are now closed.

Latest News Articles

Most Popular Articles

Follow Us

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Resources

Best Deals on GoodGearGuide

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?