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iPhone 3G Costs $100 To Make

The numbers are speculative based on a SWAG.

And I bet if you took two identical iMacs, turn one of them upside down and compared the screen quality.

You also would be able to prove that the 24" al-iMac 2.8 machine uses a cheaper screen than the 24" al-iMac 3.06 machine.

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Personally, I haven't looked at part numbers to compare them and contrast.
 
before all these posts came out about the plastic back, the inferior screen, no camera upgrade, etc, etc...i thought the exact same thing.

when i saw the wwdc and he announced the 3g so "matter of fact" and skimmed over it, my immediate thought was Apple is just trying to cost corners now and lower cost so more people can get the phone and pay for the plans....no matter what compromises have to be made.

i'm sad to say, but the v1 iphone is the greatest phone we can possibly get right now and probably for the next year. the 3G is just a lower grade item compared to v1 and we'll have to deal with that fact until the next revision comes out in 2009 (hopefully).
 
WhySoSerious said:
before all these posts came out about the plastic back, the inferior screen, no camera upgrade, etc, etc...i thought the exact same thing.

when i saw the wwdc and he announced the 3g so "matter of fact" and skimmed over it, my immediate thought was Apple is just trying to cost corners now and lower cost so more people can get the phone and pay for the plans....no matter what compromises have to be made.

i'm sad to say, but the v1 iphone is the greatest phone we can possibly get right now and probably for the next year. the 3G is just a lower grade item compared to v1 and we'll have to deal with that fact until the next revision comes out in 2009 (hopefully).
Click to expand...

or deal with the fact once the reviews come out and you have it in your hand to compare...
 
Wonder what happens when you factor in research and development, shipping costs, customer care costs, employee training, store stocking, warehousing, warrantee exchanges, and ... or are these all free to Apple?:confused:
 
That's not what it costs to make. That's a highly misleading article. It's what the individual components cost. How bout Apple send you those? You won't get very far! On top of that you have to add production, marketing, all those kind of things. In the UK the iPhone will be sold by Apple to O2 for MUCH more than we are paying for it. O2 recoup that cost by charging a relatively high tarrif price. That's how subsidised mobile phones have worked for years. Ever tried to replace a phone outside insurance when you've lost one mid contract? I got a quote for a Nokia N73 once, and it was £450!
 
Also, some components are cheaper now then they were before, say like Memory. 8GB back then was a lot more expensive than what 8GB is now, the price of memory has actually fallen over 75%
 
Julien said:
Wonder what happens when you factor in research and development, shipping costs, customer care costs, employee training, store stocking, warehousing, warrantee exchanges, and ... or are these all free to Apple?:confused:
Click to expand...

No, but they're not huge on a per phone basis when you're talking about selling ten million of them.

Obviously, normal cell phone manufacturers wouldn't have to worry about the store-related stuff, since they're just a supplier.

R&D is one time across the board and much cheaper with the second phone. If it even cost over a couple million dollars for the little that was changed, I'd be surprised. Sell only five million phones and it adds less than a dollar each.

Construction (in China), boxing and shipping is a per unit cost and is something all phone makers pay for. (Line workers only make $1.50 a hour there.)

The App Store will also finance a lot, for Apple doing very little in return.
 
it makes no sense to me how people think $100 is cheap. that is 25% of their selling price.... how much do some of you people expect them to pay to make an iphone?
 
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kdarling said:
Julien said:
Wonder what happens when you factor in research and development, shipping costs, customer care costs, employee training, store stocking, warehousing, warrantee exchanges, and ... or are these all free to Apple?:confused:
Click to expand...

No, but they're not huge on a per phone basis when you're talking about selling ten million of them.

Obviously, normal cell phone manufacturers wouldn't have to worry about the store-related stuff, since they're just a supplier.

R&D is one time across the board and much cheaper with the second phone. If it even cost over a couple million dollars for the little that was changed, I'd be surprised. Sell only five million phones and it adds less than a dollar each.

Construction (in China), boxing and shipping is a per unit cost. Figure $3-5 each.

The App Store will also finance a lot, for Apple doing very little in return.
Click to expand...

apple isn't going to make that much from the app store. That 30% is going towards server maintenance, not profit.
 
MyJelleo said:
apple isn't going to make that much from the app store. That 30% is going towards server maintenance, not profit.
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Hardly. Servers aren't that costly to get and maintain, or even to rent space on.

And it certainly doesn't cost MORE to host more expensive apps. Free apps will see more downloads.

Let's say TomTom gets 10,000 buyers at $150 each. That means Apple gets $500,000. Ten thousand downloads is peanuts and does not need a half million dollars in servers, even if you factor in support for free apps.

Google's Android has a much more fair concept for their store: a flat fee plus increments for extra amounts of downloads.
 
kdarling said:
Hardly. Servers aren't that costly to get and maintain, or even to rent space on.

And it certainly doesn't cost MORE to host more expensive apps. Free apps will see more downloads.

Let's say TomTom gets 10,000 buyers at $150 each. That means Apple gets $500,000. Ten thousand downloads is peanuts and does not need a half million dollars in servers, even if you factor in support for free apps.

Google's Android has a much more fair concept for their store: a flat fee plus increments for extra amounts of downloads.
Click to expand...
Um... 30% won't do that much, especially considering that there will be a lot of free apps. Not only are they running the servers, but they're also paying for software development, credit card fees, bandwidth, etc. And when there are lots of free apps thrown into the game, they still have to pay for hosting and bandwidth. Also remember that the apps have to be tested and approved, and they will need to have people working in customer support for this as well.

This will be like iTunes: an easy and integrated service, but not a huge profit machine. Sure they'll make some money, but not much.
 
Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU like Mac OS X; en) AppleWebKit/420.1 (KHTML, like Gecko) Version/3.0 Mobile/4A102 Safari/419.3)

yeah...as I was saying: apple will not get that much from the app store.
 
trevreyno said:
interesting.........

http://www.trustedreviews.com/apple/news/2008/06/18/iPhone-3G-Costs-100-To-Make/p1
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You know, I really don't care. Really. It's irrelevant: you have no practical way of influencing the cost of the phone, no matter what you think the profit margin on it is. The only relevant question is "Is the total cost of ownership for the phone over the contract period worth it to me and affordable for me?". If so, buy it. If not, don't. Simple.

kdarling said:
Hardly. Servers aren't that costly to get and maintain, or even to rent space on.
Click to expand...

Well, most of the developers seem to be happy with the deal and not to think it's an excessive margin. Also, you do have to bear in mind that (rightly or wrongly) Apple need to employ people to scrutinise and approve/reject apps an that this has to be done within a reasonable timeframe. Those people have to get paid somehow.
 
akonradi said:
Um... 30% won't do that much, especially considering that there will be a lot of free apps. Not only are they running the servers, but they're also paying for software development, credit card fees, bandwidth, etc. And when there are lots of free apps thrown into the game, they still have to pay for hosting and bandwidth. Also remember that the apps have to be tested and approved, and they will need to have people working in customer support for this as well.

This will be like iTunes: an easy and integrated service, but not a huge profit machine. Sure they'll make some money, but not much.
Click to expand...

Amen. Exactly. People far too easily assume Apple makes money hand over fist on all products and services they sell.
 
Julien said:
Wonder what happens when you factor in research and development, shipping costs, customer care costs, employee training, store stocking, warehousing, warrantee exchanges, and ... or are these all free to Apple?:confused:
Click to expand...

Well, that kind of crazy logic eludes Portelligent. In other news, this just in from Portelligent: "Apple's Final Cut Studio only costs $0.04 to make."
 
Why do most poeple think 30% only goes towards that one app? They can use the 30% of paid applications to help host the numerous free downloads (which will possibly take a ton of bandwidth).
 
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