Rick Merritt over at EETimes has written an interesting article analyzing the probable component costs of the next generation iPhone 3G. The verdict? “The raw cost of materials to build the iPhone 3G could be nearly half that of the original model.” Not to be overly dramatic but holy moly! Lower costs + ample margins = tidy profits. And that’s before factoring in the almost certain payment that carriers will make to Apple under a new business model (in lieu of revenue sharing). This carrier payment has been estimated to be in the vicinity of $200. Bottom line … iPhone 3G will be a highly profitable item for Apple even before consideration of carrier payments. Carl Howe, Director Enterprise Software Research at Yankee Group, has written good “on topic” article over at Seeking Alpha. See > Apple’s iPhone 3G: Who Needs Carrier Subsidies?
EXCERPT: The raw cost of materials to build the iPhone 3G could be nearly half that of the original model, according to Portelligent Inc. (Austin) that conducted a teardown analysis of the first handset. The first phone had a bill of materials estimated at $170 at launch, but the iPhone 3G could have a BOM as low as $100 when it debuts July 11, said David Carey, president of Portelligent, a division of TechInsights, the publisher of EE Times. Read full article > HERE
See also iPhonAsia Jan 31, 2008 article > Apple iPhone – Market-share vs. Margins