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

On June 24, 2009

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 respectively.

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.