ISuppli: Apple only spends $174 to build each iPhone 3G
Apple was able to cut its costs by 23 percent over the first generation iPhone, and also increase its profit margins at the same time while lowering the price for consumers, according to finalized numbers released yesterday by iSuppli.
With an estimated bill of materials of $174 per unit -- taking into account a $50 charge for IP royalties -- Apple's profit margins for its iPhone 3G, according to iSuppli estimates, are in the neighborhood of 55 percent -- far higher than other manufacturers, which typically swallow much of their profits in order to ship more phones.
Bill-of-materials costs don't include software development, shipping and distribution, packaging and accessories. The analyst firm says the teardown indicates more of an evolutionary design rather than introducing anything new.
"ISuppli believes Apple aimed for a more cost-effective design for the 3G iPhone compared to the 2G, in order to lower the retail price while the company still has buzz and a perceived differentiation relative to its competitors," teardown chief Andrew Rassweiler said.
Infineon appears to be the big winner; Apple incorporates its 3G-enabled data chip with dual ARM926 and ARM7 cores. In addition, the chipmaker also has contributed its technology to the baseband, RF transceiver, and GPS.
Other companies contributing include Samsung, which provides the application processor; a WLAN device by Marvell; and a Bluetooth chip from Cambridge Technologies. Both Toshiba and Samsung are believed to be supplying the NAND flash chips.
Changes from the iPhone 2G include a single printed circuit board rather than two, and that the battery is no longer soldered into the phone. This is likely to allow the battery to be more easily serviced by Apple technicians.
ISuppli had released a projected teardown in late June ahead of the launch, when it estimated a cost of $173.