According to a new iSuppli report, each unit of the upcoming iPhone 3G only costs $173 USD to assemble and manufacture, meaning Apple could be making upwards of $500 USD profit on each phone sold.
The research group said they “virtually” tore down the phone, based on internal experts in the cellphone and wireless technology fields and were able to estimate the costs of each part and finally the unit as a whole.
If the estimates are true, then the new device will cost 23 percent less to produce then its predecessor, which cost $226 USD to make. The cut costs can be attributed to falling prices on flash memory and other individual parts.
It is believed that AT&T in the US is subsidizing the iPhone for up to $425 USD and are selling the phone for $199. Using some quick math shows that AT&T is paying $624 for a phone that only costs $173 to produce, leaving Apple with huge profit margins in the process.
The report also added that the manufacturing costs should keep declining regularly and that if left untouched, the phone will cost $126 to produce in 2012.