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The Real Cost of an iPhone 3GS

That’s what it costs to build an Apple iPhone 3GS, which sells for $199.

The estimate is based on a tear-down analysis of the new 16 GB phone, done by iSuppli, which conducts technology research and breaks down electronic devices to measure value.

You might call the iPhone a bargain at its advertised price, but wait, there’s more: The $199 tag in the United States is based on a customer’s signing a two-year service contract with AT&T, the exclusive carrier for iPhones. The basic AT&T contract with mandatory data plan costs a new customer about $80 a month, according to AT&T’s Web site.

For those who want to buy the phone without a contract — that is allowed this year — the retail price jumps to a whopping $599 for the same model. Of course, there is an iPhone-like device that performs many of its infotainment functions but isn’t a phone, and has a starting price of $229: the iPod touch.

According to iSuppli, the $179 wraps in materials and the cost of manufacturing it. In the real world, the seller must add the costs of marketing, distribution, the accessories bundled with the device and a host of other expenses.

Said Andrew Rassweiler, principal analyst for iSuppli, in his report, there’s “a great deal of similarity between the 3G and the 3GS. By leveraging this commonality to optimize materials costs and taking advantage of price erosion in the electronic component marketplace, Apple can provide a higher-performing product with more memory and features at only a slightly higher materials and manufacturing cost.”

Toshiba, Samsung and Infineon are the major suppliers for the iPhone bits. There’s a component breakdown on the site.

[Thanks: http://gadgetwise.blogs.nytimes.com]

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