iPhone 3G might actually cost $173, says iSuppli

Sometime last week analysts at Portelligent claimed that Apple was spending a mere $100 per iPhone 3G, but iSuppli, purveyor of such things, is claiming a preliminary “virtual teardown” of about $173.

“At a hardware BOM and manufacturing cost of $173, the new iPhone is significantly less expensive to produce than the first-generation product, despite major improvements in the product’s functionality and unique usability, due to the addition of 3G communications,” said Dr. Jagdish Rebello, director and principal analyst for iSuppli. “The original 8Gbyte iPhone carried a cost of $226 after component price reductions, giving the new product a 23 percent hardware cost reduction due to component price declines.”

According to iSuppli, Apple typically sells their iPods and iPhones at a 50 percent markup. The future cost of the device is quite interesting, but chances are that Apple will release a new device before it gets to that point, right?

The BOM/manufacturing cost of the second-generation iPhone will decrease to $148 in 2009, down 37 percent from $173 in 2008, according to data from iSuppli’s Mobile Handset Cost Model (MHCM). “If the 3G iPhone design is unchanged, the cost will decline to $126 in 2012” said Tina Teng, wireless communications analyst at iSuppli.