[PCWorld]

Post your comments for Apple's iPhone 3G S Dissected: What's the Real Cost? here

[JakeWharton]

The iPhone 3GS 16GB retails for $599 not $199. You go on to state that the carrier subsidizes the cost to create the $199 price point but the first paragraph makes it seem like Apple only makes ~$20 when in fact they're making more like $420 per phone sold.

[djalan]

Hmmm... So according to the article, the OLD iPhone costs $5 LESS to make? So that would put it at a COST of $174.33 (as stated)...

Funny, they are selling them for $99 now! I guess they must have thousands that they just want to get rid of and don't care that they will be losing money on everything...

[a10t2]

At&T isn't paying anywhere close to $599 though, and whatever that price point is, it's where the vast majority of iPhones will be sold.

[Undefined]

A cheaper iphone wasn't debuted at WWDC? Not only was a $99 iPhone debuted, but it is the same 3G we've been using for a year. I just don't understand why people were getting so excited about a $99 iphone but then when it comes out no one's talking about it. A $99 IPHONE 3G IS OUT WITH ALL THE SAME FEATURES!!!!

[PCWorldJR]

Jake: The $199 mention was referring to the cost when accompanied with a new AT&T contract. We've added a parenthetical note into the story to make that more clear.

djalan: Yep, $174.33 for the 3G 8GB, according to iSuppli's breakdown.

JR

[georgerebello]

I agree with Jake. Apple is making a ton of money on these Phones, don't be fooled.
It "retails" for $199 only with a two year service contract (3 years in Canada), and that is where the rest of the cost is paid for, in your monthly bill.

[georgerebello]

djalan: That doesn't mean they lose money on it, it just means that the carrier pays more than that and you pay the rest through your bill (as stated above)

[callawi]

Actually, no one really knows how much it costs to manufacture an IPhone. Even Apple would need to estimate costs based on the number of units it expects to sell. The article explains that software costs are not included in the total and they could potentially amount to more than the cost of the hardware. Of course the total software cost per unit would go down as the number of iPhones manufactured increases.

[callawi]

advertising, marketing and distribution costs also need to figure into the equation.
It is really a moot point. Apple will try to keep the pricing as low as it can and still make a decent profit, so it can increase it's market share in the cell phone market.
I would happily plunk down $200 for an iPhone, if I didn't have to switch carriers.

[Yoni]

They are loosing no money at all. AT&T pays Apple $325-$375 per sold item. Every time AT&T sells an iPhone with two years contract they are quietly passing the costs of that phone to the customer. That's why you have to pay $30 for "unlimited data" every month in your iPhone bill whether you like or not.

Also I do believe that $179 is the real cost of the phone (including software, advertising, and any other fee you may want to include) considering the amount of money Apple counts with to effectuate massive purchases.

1 unit = $24
1 000 000 000 units = $16 each

That's the way it has always been.

Welcome to our world. It extends beyond your backyard.

[georgerebello]

What does that even mean?

[pddcoo]

...but don't forget the market research, software/firmware development costs, regulatory research, engineering design, and on and on. This analysis might be worthwhile to a competitive manufacturer, but it's not too relevant to customers.

[georgerebello]

None of this seems like it's particularly relevant to anyone. People just release reports on iPhones, Wii, etc because it gets their name out there.

[qbit9]

This is really STUPID. These are probably the same people who think milk comes from a carton.