The teardown specialist group of Portelligent has not only gotten their hands on a 3G iPhone, they have already managed to break it apart and tell the EETimes about it. From this, they found the cost of all the parts in the device to be a total of around $100, meaning Apple is making about $99 on each phone (not considering manufacturing costs, etc). This $99 profit is down from $299 on the previous versions of iPhones, but the money Apple will lose in profit on each device, they will make up for by selling a lot more units due to the $199 price tag. Portelligent goes on to add that the reason the parts cost has gone down is because of a less expensive touch screen assembly, among other things.
David Carey, president of Portelligent, says “They [Apple] are probably not as worried about iPhone hardware profits as they are about getting a piece of the action on service revenues and getting more Macs in homes and offices all around the globe.” In my opinion, he’s right. Apple knows that in order to go mainstream with their device, they can’t price it around $399 like the first gen. By lowering the price, they lose out in some profit, but the halo effect that arises from the 3G iPhone will be worth it.
Via [MacNN]
Apple is making considerably more per unit than $99. The new price of $199 reflects a change in the agreement with AT&T;, instead of apple getting a share of revenue from subscriptions, AT&T;subsidizes the price of the iPhone in order to sell more hardware, but gets to keep all of the subscriber revenue. Guesses are they are subsidizing $200 of the price, so Apple is recieving $399 per iPhone sold from AT&T;, and $499 for the 16GB Model. Putting their profit per phone closer to $300, and $400.