If the 4G launches and prices stay the same, there will be this murky grey area at $500 - $700 where it will be hard to justify a 3GS over a iPad, phone capabilities aside. Okay If the iPad costs: Wifi: 16gb $500 32gb $600 64gb $700 3G 16gb $630 32gb $730 64gb $830 and the iPhone 3GS costs: 16gb $600 32gb $700 and the iTouch costs: 8gb $200 32gb $300 64gb $400 what will the iPhone 4G cost??? In my mind, the logical order of mobile Apple products is as follows: iTouch < iPhone < iPad < Mac. Following that logic, I can only assume that the base NON-SUBSIDIZED iPhone 4G will have to be cheaper than the base Wifi iPad. Yes, I realize the iPad is not a phone, but it does have a 3G chip so the price of the chip should not be taken into account. The hardware is there, minus the microphone and software. So an iPad is superior technology wise in all categories yet at current pricing it only holds a $30 lead over the base 3GS. According to the iSuppli 3GS component price breakdown, http://www.isuppli.com/News/Pages/iPhone-3G-S-Carries-178-96-BOM-and-Manufacturing-Cost-iSuppli-Teardown-Reveals.aspx?, the 16gb flash memory comes in at $24, the display module comes in at $24, the touch screen comes in at $16, the processor at $15, and the 3G chip at $13. Everything else is less than $10 each for a grand total of ~$180. If we believe this breakdown, then the 3GS is sold for 3.37 times its actual value. If we apply that same logic to the iPad we get these rough estimates. Let us just say that there is only a 3x markup. However I doubt Apple will be making such a profit at first. Wifi: 16gb $500 = $166 actual cost 32gb $600 = $200 actual cost 64gb $700 = $230 actual cost 3G 16gb $630 = $210 actual cost 32gb $730 = $245 actual cost 64gb $830 = $275 actual cost This pricing scales accurately with the increasing size of 16gb flash modules at $24 each. EX: $166 + ($24*3) = $238 ~= $230 And for the iPad, lets suppose that the display module is 3 times the price since it is 3 times as large as the iPhone. So $75. Same for the touch screen so $48. Only thing we are not too sure about is the price of the A4, and I doubt Apple will ever tell us. So we have an iPhone at $180 + $75 + $50 + A4 chip = $305 + A4 chip. If the A4 costs $50 we have $305 - $15 iPhone chip + $50 = $340. That equals a markup of 1.85x. Applying 1.85x to the iPhone 4g we get $333 and $380. Both way too cheap for Apple. Anyway after all the mumbo jumbo, I don't see how Apple could justify a 4G base price so close to the base price of a far superior product, the iPad. Please keep in mind we are talking about NON-SUBSIDIZED iPhones here. So when the iPhone is released this is what I think will happen. A switch to a smaller markup which means: iPhone 4G Non-Subsidized 32gb $500 = 2.5x markup 64gb $600 = 2.35x markup Subsidized 32gb $200 64gb $300 Any thoughts on this? Did you get lost in the math? I did a couple times. Will Apple lower the non-subsidized price of the 4G to create more of a buffer between its products? Or will they maintain this gray area where its hard to decide which is a better buy? One thing is sure, whatever the price, people will buy it.