• 3g iPhone Construction Cheap(er)

    With the launch of the 3g iPhone Apple has one goal: Sales and Market dominance. The result? The 3g iPhone is cheaper to produce than the 1st generation iPhones a year ago. Lowering the price of production has allowed Apple to lower the price of the iPhone making it more accesible to millions worldwide.

    The 3g iPhone costs approx. $174.33 in materials vs. the $227 materials bill for the first generation iPhone. If iSuppli is correct on these numbers each new iPhone 8 gb costs $53 less to make than the previous version.

    How much is Apple making per each 3g iPhone? $199 price tag + $300 AT&T subsity -$174.33 in parts - around $50 in IP royalties per unit shipped = a gross profit margin of 55% or about $274.

    Although research and development, marketing, shipping, etc. are not taken into account 55% is a great number when compared to other manufacturers hardware margins. Nokia has a 36% margin across the board with its high-end models seeing a 45% margin.

    Well done Apple. Sell more units, make more money, control the market.

    [via iSuppli and businessweek]
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