Apple's iPhone 3GS Costs $179 to Build

[Marcus Yam]

It costs nearly the subsidized price just to make one.

Apple's iPhone 3GS Costs $179 to Build : Read more

 

[The_Blood_Raven]

Ya but it costs $200 + $1000+ to buy one. I think they can spend $180+ to get it on the shelves.

 

[opmopadop]

"The entry-level, 16Gbyte version of Apple Inc.’s new iPhone 3G S carries a BOM cost of $172.46 and a manufacturing expense of $6.50, for a total"

Okay, we got that part...

"Mind you, the figure of $178.96 is just the bill of materials. It does not include other costs, including manufacturing, software development..."

So is manufacturing included in the original cost or not?

 

[war2k9]

It is not to bad for apple charge $199 for the phone. The only thing that I don't like is the att phone service and plans.
I would like to know which new smart phone and carrier doesn't requires a 2 year plan.

 

[coopchennick]

Oh shit! someone tell apple they aren't being greedy enough!

 

[tayb]

Apple doesn't charge $199 for the phone. Apple charges about $599 for the phone. AT&T eats more than half of the cost to get it into the consumers hands for cheaper. I know that marketing, design, and all of the other work that goes into making a cell phone is expensive but it isn't $400 per device. I would say Apple is making a hefty profit on each device sold. Good for them. Making a ton of money and most people wouldn't know anyways because AT&T sells it for so cheap.

 

[Core2uu]

Oh, they're only making a profit of 235% then, or $420.04 per iPhone 3G S. That only totals to about half a billion dollars of profit on the 3GSs they've sold so far. At least Steve Jobs will have his medical expenses covered.

 

[the last resort]

^^exactly. AT&T pays Apple a bunch of money so that the phone itself is cheaper, giving Apple the profit they are looking for. Then, AT&T charges $90 for 450 minutes and data/texting. For unlimited minutes and data/texting, the price is $150 month.
For 24 months, AT&T will make over $2000 in pure profits (for this example towers, etc, are paid for by the lower phones/contracts.) since data transmission costs next to nothing. So, for the 17 million iPhone and iPhone 3G (NOT INCLUDING THE iPHONE 3GS), that is $34 BILLION in profit, on the iPhone ALONE. Add in the oh, lets say 5 million iPhone 3GS's sold so far (rough estimate) and they have another 10 BILLION in profit.
Yes, a little of this goes to subsidize the cost of the phone, but for AT&T, that amount is just a paltry sum. And this is just AT&T, not all the other cell phone companies.

I just realized how insane cell phones are. I was just in a verizon store, and found out that i could 1) no longer buy a Moto Q9c and 2) it would have to come with a data plan from now on. This is how verizon sucks the money out of everyone who wants a smartphone.

/end rant

 

[Core2uu]

Really, the iPhone 3G S fixes a bunch of the shortcomings of the 3G, but it is still too damn ridiculously pricey. I'm not attributing this just to the price of the iPhone, but the expensive plans. Price, AT&T, and lack of multitasking support are the only things preventing the iPhone from reaching world domination, and until those issues are addressed, I will never purchase one.

 

[liemfukliang]

Why oh why there is anyone who make BOM of a Printer INK?

 

[enewmen]

[citation][nom]war2k9[/nom]It is not to bad for apple charge $199 for the phone. The only thing that I don't like is the att phone service and plans.I would like to know which new smart phone and carrier doesn't requires a 2 year plan.[/citation]
There's a whole lot of unlocked phones you can legally buy and service that doesn't require 2 year plans. I got an unlocked N97 with 32+16 gigs of internal Flash. Also got an unlimited HSDPA data monthly plan for $16/month in Singapore. So, it's at least possible.

 

[roholidays1]

He was reffering to finding a subscription in the US with the purchase of a smart phone. in the US buying an unlocked smart phone is not that simple, they do this from regullar stores like Best buy and there is not cheap. Grey market for cell phone in the US is not that popular with average Joe, like it is in the rest of the world...Keep that in mind...Most of the articles you read here are reffering tot he US market

 

[ssddx]

[citation][nom]liemfukliang[/nom]Why oh why there is anyone who make BOM of a Printer INK?[/citation]

Not much at all.

Now, on to why printer ink is so expensive. We wish there was some complicated reason like it costs a lot of money to produce or something like that, but the truth is that printer ink is so expensive because manufacturers can make it that expensive. HP is obviously a huge company that has a ton of products and services, but more than 50% of their operating profit comes from printer ink and toner. So for them, the high cost of printer ink subsidizes their business. Now there is some research and development that goes into it, but the truth is that “ink is ink” and it’s not rocket science. Printer manufacturers run a monopoly where they sell a printer at a loss and then make it up with their ink. They have been able to get away with it because for one, people never really considered how little they were getting for their money. Before home photo printing took off, most people bought a few printer cartridges a year and didn’t think much about it other than the shock they might have experienced when they were actually paying for the cartridge. Secondly, there didn’t use to be any alternatives. If you had an HP printer and you wanted to print, you had to buy HP printer ink. So therefore, the printer manufacturers knew they could charge whatever they wanted. Once they sold you the printer, there was no competition.

 

[doomtomb]

[citation][nom]opmopadop[/nom]"The entry-level, 16Gbyte version of Apple Inc.’s new iPhone 3G S carries a BOM cost of $172.46 and a manufacturing expense of $6.50, for a total"Okay, we got that part..."Mind you, the figure of $178.96 is just the bill of materials. It does not include other costs, including manufacturing, software development..."So is manufacturing included in the original cost or not?[/citation]
I was gonna say the same thing. To answer your question, the $178.96 is including material costs and manufacturing costs but still leaves out some things. The only problem here is that Tom's doesn't know how to read, proofread, or edit in any shape or form.

 

[Tedders]

[citation][nom]tayb[/nom]Apple doesn't charge $199 for the phone. Apple charges about $599 for the phone. AT&T eats more than half of the cost to get it into the consumers hands for cheaper. I know that marketing, design, and all of the other work that goes into making a cell phone is expensive but it isn't $400 per device. I would say Apple is making a hefty profit on each device sold. Good for them. Making a ton of money and most people wouldn't know anyways because AT&T sells it for so cheap.[/citation]
I would much rather AT&T eat the cost than me

 

[Guest]

Unless they are seriously getting screwed on some of the charges from their suppliers, I call BS on this. 16gb of flash should be piss cheap now, you can buy a 16gb flash drive for like $30-40 now, and that's including the retailer and manufacturer taking their cut. This is probably just a puff piece to justify outrageous Apple prices. Let me guess, parts for a Macbook costs $1800, right? They're not making a dime....

 

[sublifer]

and doubling the flash costs apple $10 but they tack on $100... thats where they make their money

 

[joebob2000]

[citation][nom]NopeNotBuyingIt[/nom]Unless they are seriously getting screwed on some of the charges from their suppliers, I call BS on this. 16gb of flash should be piss cheap now, you can buy a 16gb flash drive for like $30-40 now, and that's including the retailer and manufacturer taking their cut. This is probably just a puff piece to justify outrageous Apple prices. Let me guess, parts for a Macbook costs $1800, right? They're not making a dime....[/citation]

Right, iSupply is an Apple shill... In a word, no. In several words: consider the fact that the memory has to be ultra-low-power, relatively fast, and most importantly very compact, and it is not your run of the mill bargain bin USB stick component.

In other news, my Blackberry Storm is still made from more expensive components. Take that, Apple elitists.

 

[Guest]

joebob2000: That was the dumbest post I've ever read... Is iFlash memory made of solid platinum? Please explain the difference between that and the flash memory that peasants use... and explain why it's sooooooo much more expensive to make... We know that the LCD part of the phone doesn't cost that much either, nor are the CPUs used in phones that expensive, so yes, anything mass produced in millions of units shouldn't cost that much....

 

[joebob2000]

[citation][nom]URaFuggingIdiot[/nom]joebob2000: That was the dumbest post I've ever read... Is iFlash memory made of solid platinum? Please explain the difference between that and the flash memory that peasants use... and explain why it's sooooooo much more expensive to make... We know that the LCD part of the phone doesn't cost that much either, nor are the CPUs used in phones that expensive, so yes, anything mass produced in millions of units shouldn't cost that much....[/citation]

You try making over 128 billion transistors fit on the head of a pin and run off of 3.3v, let me know how cheap it turns out for you.

Let me rephrase: If you think iSupply is wrong, you stand to make a LOT of money as the only person in the components business who knows how much things actually cost. Yet somehow I doubt your thorough explanation of "it shouldn't cost that much" is going to go very far in the professional world.