New iPhone 3G costs $173 to make

When the new iPhone 3G came out, people were complaining about the real cost of the iPhone after a two-year period. This was all due in part to the additional $15 per month consumers now have to pay AT&T for a data plan and SMS service. Chris did the math, and says iPhone 3G owners will end up paying a little more than current iPhone owners during their two-year contract, but why?

Many have speculated the increase is due to the new deal AT&T has with Apple, and others wondered about the manufacturing costs of the new iPhone 3G, which is now equipped with a GPS chip and 3G. A research firm called iSuppli Corp did some investigating and came up with an estimate.

Apparently, Apple now pays $173 for components and manufacturing of each 8GB version of the iPhone 3G, which retails at $199. That's $53 less than Apple paid for the original iPhone which lacks a GPS chip and has a slower EDGE connection.

These prices don't include the cost of software, packaging, shipping, or accessories, so the real cost of the iPhone 3G is a bit higher.

Lucky for Apple, that doesn't mean the company is only making $26 for each 8GB iPhone 3G it sells. On the contrary, the company is actually subsidizing the phone to AT&T who is probably paying Apple anywhere between $300-$350 for each phone it activates, and AT&T is passing on the costs to the consumer.

Obviously, all these figures are based on speculation since Apple hasn't publicized the costs, but they're interesting figures nonetheless.

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