Not only did Apple sell 1 million iPhone 3Gs in three days, but the company is making a healthy margin on each one sold. That’s the conclusion of researchers at market research firm iSuppli, who took apart the new device to learn who made what inside, and how much Apple spent on the parts.
The total cost of materials used inside the latest iPhone is $174.33, a dollar and change higher than the preliminary estimate iSuppli made in June, about two weeks before the phone was actually released. If the analysis is correct, Apple is spending about $53 less on materials than it did with the first iPhone, which iSuppli says costs $227 to make.
After accounting for a subsidy from AT&T, iSuppli reckons Apple makes a per-unit gross profit of 55 percent. That’s a fatter margin than other phone manufacturers tend to make on their own handsets and reflects falling component costs and Apple’s ability to negotiate a bargain from suppliers. Nokia, the world’s largest handset maker, averages 36 percent hardware margins across all its products, while certain high-end models command hardware margins of 45 percent.
Apple sliced $200 from the price of its least expensive iPhone in part through a generous $300 hardware subsidy from AT&T, the exclusive U.S. carrier for the iPhone. “We think Apple aimed for a more cost-effective design for the 3G version of the iPhone compared to the 2G, in order to lower the retail price,” says Andrew Rassweiler, an iSuppli analyst who managed the teardown. “The lower price will encourage adoption and allow Apple to capture more of the market now, while it still has a buzz and a perceived differentiation relative to its competitors.”
What’s Inside?
Many of the companies supplying parts for the latest iPhone have remained the same, iSuppli found. German chipmaker Infineon appears to…