The mystery behind why the new iPhone is so cheap may be solved, with market researcher iSuppli saying it costs just US$173 to make.
Apple caused a stir earlier this month when it launched the new 3G (third generation mobile telecommunications) iPhone with a $199 price tag. Similar products from rivals cost much more. Taiwan’s High Tech Computer (HTC), for example, has priced the Touch Diamond at NT$23,900 (US$785) for its home market, while Nokia estimates its new N96 smartphone will retail for €550 (US$855).
All three handsets are due on store shelves soon.
There are two main reasons Apple can charge so little for the new iPhone, iSuppli said Tuesday. First, mobile phone service providers will subsidize the handsets by paying Apple about US$300 per unit, iSuppli estimates. The other reason is the low cost of materials going into the handset.
Apple did such a good job choosing components for the new 3G iPhone that it costs less to make than the old version, despite significant improvements, iSuppli said. The old iPhone cost $226 to make and did not include 3G nor GPS (global positioning system). Yet Apple sold the original iPhone for $499 initially. More—>
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