iPhone 3G costs $173 to make

Discussion in 'iPhone' started by yode, Jun 24, 2008.

  1. yode macrumors 6502

    Joined:
    Jul 29, 2007
    Location:
    Los Angeles
    #1
    http://news.yahoo.com/s/ap/20080624/ap_on_hi_te/tec_apple_iphone

    What was with the $100 that was previously stated?
     
  2. The Sweet Love macrumors newbie

    The Sweet Love

    Joined:
    Jun 23, 2008
    #2
    Anyone want to come over and make iPhones in my basement? I will supply pizza..and more importantly no two year contract, or higher price for those not eligible for an upgrade! jkjk

    However this story is very interesting. Even after hearing Apple will be making hundreds of dollars per sale..I still don't see why they would enter in an agreement with AT&T that would allow them to possibly sell the iPhone to existing customers who are not eligible for an upgrade at the price the paid Apple or higher. AT&T could break even or even make a profit off the phones...plus the extra money they make for the data plans that Apple sees none of. Seems like a bad deal for Apple.
     
  3. Me1000 macrumors 68000

    Me1000

    Joined:
    Jul 15, 2006
    #3
    no one has any idea how much it costs to make...
    Speculation and estimates are just about pointless!
     
  4. bmms8 macrumors 68020

    Joined:
    Dec 19, 2007
    #4
    even if they do not make that much on the handset, they will make more than a bundle off of the appstore. also, remember that ATT is paying a subsidy, so they do get more than $199.
     
  5. Michael CM1 macrumors 603

    Joined:
    Feb 4, 2008
    #5
    Why does some news outlet make like it's some shocking discovery that something is sold for way more than the parts' total cost? Ask ANYBODY who manages any company and they will tell you the No. 1 cost: labor.

    Part of me thinks these articles are some people annoyed at the price, because nobody ever does a story that says "Price of parts for McDonald's 32-ounce Coke: 5 cents."
     
  6. 7on macrumors 601

    7on

    Joined:
    Nov 9, 2003
    Location:
    Dress Rosa
    #6
    I used to work at McD's. and believe me it's waaaaaaaaay less than 5 cents. the coke itself is about 0.02 cents and the cup might be 2 cents tops.
     
  7. Michael CM1 macrumors 603

    Joined:
    Feb 4, 2008
    #7
    You forgot the ice and the straw!!!!! That's your missing penny! :)
     
  8. kdarling macrumors demi-god

    kdarling

    Joined:
    Jun 9, 2007
    Location:
    Cabin by a lake
    #8
    I believe the current rate for electronic assembly workers in China is about $1.50 an hour.

    If each worker put together just 4 iPhones an hour, the assembly labor cost is less than a US first class stamp.

    There's a reason why Apple has $18 billion in cash reserves, double what they had just a couple of years ago. And they only spend 3% of their sales income on R&D.
     
  9. bmms8 macrumors 68020

    Joined:
    Dec 19, 2007
    #9
    that might be true, but i truly do not believe apple is trying to make money on the iphone itself. i do believe that the appstore will bring them huge revenues. along with selling the iphone comes hundreds of expenses...
     
  10. kdarling macrumors demi-god

    kdarling

    Joined:
    Jun 9, 2007
    Location:
    Cabin by a lake
    #10
    They're definitely making money on the iPhone itself. But I agree that Apple is keen about selling add on services / music / videos for longterm revenue.

    I agree, but I had to chuckle this morning because...

    1) On the one side, there are many people predicting that Apple is going to make millions off the app store.

    2) On the other side, there are also lots of people trying to claim that Apple must charge 30% because "that will barely cover the cost of servers and hosting free apps, etc". Poor Apple, they'll make no money at all.

    It can only be one way or the other. Hint: it's NOT #2. Jobs is out to make money, not become a charity. :)

    Cheers - Kev
     
  11. bmms8 macrumors 68020

    Joined:
    Dec 19, 2007
    #11
    I totally agree with you, they will make money on the iphone. no one knows this, but my opinion is that over time, they will make a lot on the appstore. over time it seems like expenses will go down with the appstore, while selling the actual product will always have expenses.
     
  12. tritonj macrumors 6502a

    Joined:
    Jun 12, 2008
    #12
    iPhone is a platform, just like a PS3 and XBox 360 are platforms. the money isn't made in hardware it is in the software.
     
  13. dgdosen macrumors 65816

    dgdosen

    Joined:
    Dec 13, 2003
    Location:
    Seattle
    #13
    So now I wonder what Apple is really charging AT&T for a phone - I wonder if it's really the 199+325 or $525 - because you know that's what AT&T is representing (or rumored to represent) to the gullible.

    Of the $173, I agree labor isn't included, nor is the investment in the iPhone 3G, but I know incremental labor is marginal and investment costs will be dwarfed by the volume that Apple does on this device. Both AT&T and Apple are overly greedy. I'd say a fair end-user price for the 3G phone is about $300-400 (16 GB no contract) with unlimited data - including tethering for $20/data $30/voice a month. - Let's hope the GPhone will push the market towards what is a bit more sane from an economic perspective. Otherwise, Apple will sell 10 million iPhones, when they could sell 100 million...
     
  14. bmms8 macrumors 68020

    Joined:
    Dec 19, 2007
    #14
    I don't understand how a business can be overly greedy with money when their customer base is so loyal, i am sure we are not loyal on wasting our money on the products they offer. There is no other phone on the market today which offers anything close to the iPhone for $199.

    Based on their monthly plan, members are idiotic to be upset that ATT is charging $30 for unlimited data when any other phone costs $30 for the same service. Apple customers cannot always have a "special price" forever.
     

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