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Apple's iPhone 3G S: the $179 handset

Parts and labour cost just $9 more than Palm Pré's

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It costs Apple roughly $3 more to make an iPhone 3G S than it does Palm to pump out a Pré, hardware analysis by market watcher iSuppli has revealed.

iphone3gs_explode

An expoded view of the iPhone 3G S
Image courtesy of iSuppli

Following a Bill of Materials (BoM) and manufacturing breakdown of the iPhone 3G S, iSuppli concluded that each unit will cost Apple $172.46 in components and $6.50 to manufacture.

By contrast, the same analysis conducted on the Pré back in April discovered that Palm’s smartphone costs $170 in components.

The analysts’ latest BoM breakdown was conducted on a 16GB iPhone 3G S. It discovered that the phone’s priciest part is its Flash memory, supplied by Toshiba at a cost of $24.

Apple’s second highest outgoing is the phone’s Toshiba-supplied 3.5in display module, which costs $19.25, iSuppli said.

One of the iPhone 3G S’ cheapest components is it GPS receiver, iSuppli discovered, which costs just $2.25.

The latest iPhone sports several hardware improvements over its predecessor. For example, the 3G S’ processor is 200MHz faster than the 3G model’s – a change that adds $14.46 to the BoM of each new iPhone. The 3G S also has a more powerful camera than the 3G model.

However, the analyst stressed that “the 3G S hardware feature set is not much different from that of the 3G” and so concluded that, from a component and design perspective, Apple’s able to produce the 3G S “at only a slightly higher materials and manufacturing cost” than the model’s forerunner.

It’s worth remembering, though, that Apple’s $179 BOM doesn’t include additional costs, such as software development, shipping, distribution and packaging. ®

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