iSuppli is reporting that the manufacturing and components cost of 8GB iPhone 3G is about $173 per unit, which is $53 less than the earlier iteration of the iPhone that was about $226. Apple and AT&T will sell the iPhone 3G for $199 for 8GB version, but AT&T will subsidize the price of each phone –an estimated $499 for each phone. According to iSuppli Apple’s profit on each 8GB unit will be around $281 or about 56 percent.  The above cost and profit estimations don’t include software development, packaging, shipping, distribution, marketing, accessories included with each phone and other miscellaneous expenses. Aside form 3G chipset and GPS most of the components used in the iPhone will remain unchanged. The most expensive parts in the iPhone as before will remain the memory chips. The 8GB NAND flash is around $23, and about double for 16GB chips. But the biggest chunk of manufacturing and component cost goes towards royalties for patented 3G technologies and that is about $45. iSuppli says that Apple will benefit from further declines in the component prices, as price tag is likely to drop to $148 in 2009 from the current $173.
[Via Business Week]