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iPhone 3G Costs $100 To Make

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While the undoubted highlight of the iPhone 3G launch was its move to a subsidised price model it could well be that Apple is cashing in more than ever...

According to analysts Portelligent Inc it believes Apple may be building its second generation handset for just $100 (£51) having tracked down bulk prices for known (and heavily speculated) iPhone 3G components. Equally staggering, based on its calculations, the manufacturing cost of the 16GB version is only $20 more than the standard 8GB, despite the $100 end user premium.

This comes with Portelligent findings one year ago that the original iPhone cost Apple $170 to make.

"Gen2 iPhone pricing is aggressive enough that it made me think Apple's really taking the gloves off on this one," said Portelligent CEO David Carey in an interview with EETimes. "They are probably not as worried about iPhone hardware profits as they are about getting a piece of the action on service revenues and getting more Macs in homes and offices all around the globe."

Interestingly, with some lateral thinking this does make sense. Other than the HSDPA and GPS additions - both of which have been shown recently to be commodity additions - the basic hardware behind the iPhone 3G is little changed from the original. In fact, the controversial decisions to stick with a 2MP fixed focus camera, skip a front mounted camera for video calls and replace the metal back with a plastic one suggest cost cutting was at the heart of the design.

Still, with UK prices running from free come the handset's 11 July launch it is hard to see it being anything other than a success this time around.

In related news Adobe says it has successfully ported Flash onto the iPhone but has yet to get the go-ahead from Apple to roll it out on App Store. The two companies have been well known enemies over the years, so expect this one to (sadly) roll on for some time yet...

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