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iPhone Costs Only $245.83 to Build

xs411.xs.to — According to iSuppli Corp., the 4GB Apple iPhone costs only $245.83 to manufacture, with the 8GB model checking in at $280.83. What are your thoughts? View the breakdown here on digg!

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  • bgiese, on 10/12/2007, -27/+177Of course they didn't actually have an iPhone to teardown. This is pure speculation.
    Also, this doesn't cover any of the R&D costs associated with the iPhone.
    • AmishRefugee, on 10/12/2007, -73/+143yeah, R&D is half of the cost of each iPhone....

      touchscreen + harddrive + cellphone = a ***** of R&D? not really, no...

      Although, I bet a huge portion of the remaining $250-$300 is going towards Apple's unbelievably large advertising campaign which will undoubtedly flood us with more advertisements than any human brain could possibly handle in the coming months.
    • Ligeia, on 10/12/2007, -23/+90So this is just like every other cellphone?
    • mateo60, on 10/12/2007, -33/+10I'm sure Steve negotiated better prices per component, but still, wow.
    • CraigCarlyle, on 10/12/2007, -70/+46Looks like Apple is starting to become as greedy as M$.
    • dmoney22, on 10/12/2007, -25/+8No, its an *apple* cellphone.
    • rockforever, on 10/12/2007, -64/+190Your not paying for a phone, your paying for that Apple logo.
    • broomett, on 10/12/2007, -54/+44Craig..first of all...Even the Digg community thinks that peopple who still use $ are pathetic.

      Second of all...STARTING to become greedy? Apple has ALWAYS been greedy. They overprice their goods and services FARE more than Microsoft has ever DREAMED of doing.
    • godofpumpkins, on 10/12/2007, -14/+6yeah, this image has absolutely no source... not even a website with a blurb about it... I could post an image claiming the iphone cost a million dollars to make and apple is running at a loss... the mac fanboys would digg it up, and the anti-mac "you guys think you're so special" guys would digg it down, kinda like the opposite of this ;)
    • steelmaverick, on 10/12/2007, -22/+8This is disgraceful to Apple and their customers.a A $320 profit margin? C'mon. Apple shouldn't be selling the iPhone for $600, a more reasonable proce would be $400 or $450. That way, it would be more affordable and more people would buy it, causing Apple's profits to be MUCH higher.

      Its like the PS3 vs Wii debate. Would you rather spend $600 on a PS3 when you could buy two $250 Wiis for that money? That's the thing, people can have a tendency to buy the less expensive item.
    • Quix, on 10/12/2007, -53/+335In related news, Windows Vista costs 10 CENTS TO BUILD (a single DVD) yet sells for up to $399. Where's the outrage?
    • northerncomfort, on 10/12/2007, -12/+4Here's a nice analysis of Apple's strategy:
      http://www.eightysevenfour.com/2007/01/the-logic-behind-the-iphone/
    • PueSi, on 10/12/2007, -16/+8@CraigCarlyle :

      Start?!? Where the hell have you been, Apple products are always sold for a premium.
    • jcapogna, on 10/12/2007, -6/+36I was under the impression that the iPhone cost $40 million to develop.
    • anonatron, on 10/12/2007, -7/+107I am sick of seeing "looks like X company is being pretty greedy"

      Do you people realize that the idea of a business is to make money? As a matter of fact, it is their responsibility to their stockholders to make money. Think of it this way, if you owned shares of apple, wouldn't you want them to make as much profit as they can so that you can actually have stock worth owning?
    • 8177, on 10/12/2007, -22/+5Apple doesn't price its stuff like other companies.
      Most companies take the cost of production as well as R&D then adding a percentage.
      Apple basically pulls a price out of thier ass, because they know people will buy.

      [edit] I'm sorry, i cannot find a reference. I'll keep looking.

      [edit2] Anonatron you make a good point.
    • jollyllama, on 10/12/2007, -6/+51Wait, who thought that manufacturing costs are the only costs of making any product, much less a high tech product that requires a ton of engineering and software design? Think a little longer before jumping for the sensationalist headline, folks.
    • Bartboy919, on 10/12/2007, -24/+8its not speculation, apple just likes to ***** on their fan base.
    • Zoxy, on 10/12/2007, -13/+5Damn Jollyllama beat me too it.
    • SPARTACVS, on 10/12/2007, -24/+82God I hate it when people say "M$". Hey look, I'm cool too! APPL€ SUCKS!
    • CraigB12, on 10/12/2007, -22/+15I'll take a Google logo over an Apple logo any day.
    • FuManchuX, on 10/12/2007, -4/+27Come on people.... the phone isn't pure profit after the cost to make it.

      Operating expenses can easily cost half. It takes a lot of people to move all the parts around, get them assembled and then ship them to stores before they're sold to you.

      And yes... R&D is expensive. I'm sure millions of dollars were spent just to program the interface.
    • Goner, on 10/12/2007, -0/+10direct to original iSuppli article: http://www.isuppli.com/news/default.asp?id=7308&m=1&y=2007
    • FishyJoe, on 10/12/2007, -6/+46Software writes itself and is free, right?
    • kcpwnsgman, on 10/12/2007, -0/+10Note that with everything that software costs money, even though they said that OSX is running on the iPhone, it still cost money to develop it to work on the phone, practicly redesigning it to lower specs which would probably increase the cost by about $200, and don't forget the contract you have to pay for with Cingular...

      edit: FishyJoe beat me to it while I was reading the article
    • t3hX, on 10/12/2007, -10/+6>Software writes itself and is free, right?

      In Cisco's iPhone, pretty much - it seems to be a violation of the GPL...
    • InferiorWang, on 10/12/2007, -9/+3I just have to say that I love my treo. It uses the same SD memory card I already had for my mp3 player and camera. It plays mp3s, has a camera, and with certain programs I can remotely log in to my computer, ssh into the school's computers, view pdfs and powerpoint files during class and keep track of all my scheduling, phone numbers, and notes all in one place. The 650 is about $200 now and the 700 about twice that in both palmOS and windows mobile flavors. Who needs an iPhone?
    • CasaMan, on 10/12/2007, -1/+32You guys realize that most of the cloths you wear cost < $2 to produce?! And yet you pay more than 2000% off it's production costs! (damn those corps :P)
    • spartan777, on 10/12/2007, -8/+6quix:

      there's a big difference between software and hardware. Both Vista and the Apple Phone need updates and whatnot, but the iPhone just needs to work well in and of itself. Vista, on the other hand, needs to work with hundreds of thousands of different kinds of hardware and peripherals; printers, scanners, cameras, joysticks, video cards, et cetera. When you buy Vista you get an OS that does the mentioned tasks, and a bundle of other software and services. When you buy an Apple Phone, you'll be getting a phone with touch screen, a calendar app, and maybe 5 other nifty little things.

      That all isn't to say that Vista isn't going to be an overpriced piece of shiny junk, I mean to say they both will be overpriced pieces of shiny junk.
    • unibomber999, on 10/12/2007, -1/+6It doesn't matter what it costs to make, the price is $600 because their market research found that people will pay it. Early adopters get to pay for the R&D that the rest of us enjoy.
    • kimish, on 10/12/2007, -6/+1+ I bet there are hefty$ amount that goes to Singular....
    • stuartjmoore, on 10/12/2007, -1/+10actually a new multi-touch screen probably does cost a lot of R&D.
    • rblinne, on 10/12/2007, -1/+1The granularity is all wrong too. For example the ARM core would not be a separate item but buried in an ASIC. I work for an ASIC supplier and we don't break it out that way you pay for the chip. So, if they broke it out with the Broadcom/Marvell/Samsung ASICs [Note: I don't know who manufactured the ASICs this is just an educated guess.] then it would be more believable. These would also be first generations so it will take a while before the price-reduced version of the ASIC came out.
    • michaelfedigan, on 10/12/2007, -0/+3It also seems that anybody that's taken an accounting course would realize that raw materials cost don't mean that's what the product costs to make. I don't see anywhere costs included for overhead, labor, Apple advertising etc...
    • cleverboy, on 10/12/2007, -4/+8It's interesting. In the game industry, both Sony and Microsoft's boxes were broken down by price estimates, and its clear that they're both taking a dive on the cost of the hardware, hoping to make it up in software sales and licensing. Not Wii though... breaking it down, Nintendo is clearly looking to profit on their great hardware ideas AND their licensing, and STILL can't make them fast enough! The iPhone will cost consumers about as much as a Playstation 3 (currently sitting in mounting piles on eBay and in nervous basements around the country, after the bottom dropped out), and I don't think Apple has much to worry about when it comes to it being a losing venture.

      I like companies that have a clue about their demand, and look like they're offering a well thought-out offering, even if not wholly on par with the rest of the industry. I don't expect businesses to take a BATH on their costs just because customers whine about it. I expect them to make their money by knowing their market. Whether its by being a loss leader (Microsoft XBox 360, Apple iTunes), or a cash cow (Microsoft Windows, Nintendo Wii, Apple iPod, Apple iPhone)... I'll be right there with money in hand, if I like the smell of the total packaghe of what they're cooking. Everyone else can cry in their beers and try again. Don't hate them 'cause they're setting the world on fire. Jobs has said the cheaper iPhones will come in time. I remember when Apple released its $400 iPod, and I could only use it on my Mac. I didn't want a bulky freaking Nomad, and I'd just tearfully purchased a compact, and irritatingly high-maintenance Sony Mini Disc player. With tear filled eyes, I made my iPod purchase and never looked back. As much as I love my Sony Cli, no Treo or Windows Mobile has given me the allure and confidence this iPhone is projecting.

      How much did it cost Apple? I don't care. If it saves me as much peace of mind as my first iPod 5 years ago... its not really going to matter. It's also no surprise that the only game system I plan on purchasing sense I got an Intellivision for Christmas lo' so many years ago is the Wii. Provided I can find one.
    • satanscool, on 10/12/2007, -9/+2Thats retail.
      The made the phone to make money.
      They double the price to do that.
      Ever bought anything?
      They are not Dumb like microsoft and lose money on the products they make. Thats just stupid.
    • atanas, on 10/12/2007, -6/+2"Only" $245.83? With R&D, marketing and distribution costs, Apple would be losing TONS of money if it cost them that much to build the phone. $24.58, maybe...
    • wastern, on 10/12/2007, -2/+6lets see, 2 1/2 years of R&D and development. Software. Distribution. Advertising. And god forbid they make a profit.

      Apple is a business and like every business their goal in the end is to make money for their stockholders. You don't create value in a company by giving away things for free


      Why don't you go buy some parts and build your own iPhone if you think you can do it so cheap
    • stmiller, on 10/12/2007, -2/+5In other news, a $500,000 Ferrari actually only has $15,000 worth of parts. So it only costs $15,000 to build.
    • HyperionHK, on 10/12/2007, -0/+3Burying this story as pretty stupid. A LOT more than pure parts cost goes into pricing. You also have to factor in development, software, costs in the actual manufacturing, advertising, distribution, salaries, etc, and lastly, PROFIT. So of course the actual costs of the parts are gonna be less than the sale price.
    • brundlefly76, on 10/12/2007, -0/+2It also doenst represent labor, marketing, advertising, software development, or distribution.
    • KyleMistry, on 10/12/2007, -2/+5"Although, I bet a huge portion of the remaining $250-$300 is going towards Apple's unbelievably large advertising campaign...."

      "Hi, I'm an iPhone."
      'And I'm a Windows Mobile PC."
    • mrbro, on 10/12/2007, -2/+1dupe
    • tim04, on 10/12/2007, -0/+2Only? That's quite a large chunk of the actual retail price
    • sumskater41, on 10/12/2007, -0/+3First of all, 2x mark up isn't as bad as a lot of things that nike does on a daily basis. Maybe think twice before you buy a $100 pair of shoes.

      Second, like many have said, they're also charging for R&D. [/Sarcasm] Cuz if you bought the 250$ worth of materials you could definetly pull an iPhone together in an hour and a half. [/sarcasm]
    • blake213, on 10/12/2007, -0/+3For all of you that realize that manufacturing costs is only part of the expense of creating this device, and that the investment of the R&D, engineering, etc must be paid for as well, take this logic toward the music industry. Perhaps then you'll understand why an album costs $12 instead of $2. It's for the same exact reason.

      Sorry to be off topic, but there's such a double standard these days. Sure the music business is evil, but it is a business after all.
    • AmishRefugee, on 10/12/2007, -1/+1"@AmishRefugee: hard drive? I don't think they use an hard drive, probably they use flash memory."

      is it? my bad, but the point is still the same.

      about this multi-touch stuff, it's been around, I saw a massive touchscreen created a year or two ago that had extremely accurate and cohesive multitouch support, so it's nothing revolutionary and obviously nothing that couldn't be done before Apple tried it
    • guarnibl, on 10/12/2007, -0/+2It might be in terms of hardware.

      Dear lord you guys are all clueless on how much it actually costs to drop bugs from that 80% level to that 95-99% level in a product. Seriously -- you are.

      Any project manager realizes that any company taking certain quality control measures to limit the number of defects and to perfect a product -- is going to be WAY more expensive than say -- what it cost to develop a Treo, with software by Palm or Microsoft that have TONS of defects.

      I'm not saying Apple's perfect -- but I am saying that generally speaking, Apples stuff generally works a lot better than the average product on the market.
    • macfanboi, on 10/12/2007, -1/+1Steve Jobs gotta get paid some how. His $1 salary doesn't buy him ***** in Cupertino. Apple knows they can charge whatever they want and the fanboys will line up and buy it like its going out of style.
  • soccerpmn, on 10/12/2007, -13/+15They seem to want to keep the iPhone "exclusive." Well I say bollocks to that!
    • dcbebop, on 10/12/2007, -14/+21If you buy an Apple laptop, you're free to choose your OS, browser, text editor, etc. You can customize the look and feel and install any applications you want on it. iPod, the same thing ...

      If you buy an Apple iPhone, you're free to choose from one provider and feed into their required 2 year agreement. You can't customize it and you can only install Apple software.

      What's wrong with this picture? What happened to freedom of choice Steve?
    • zybch, on 10/12/2007, -19/+4Its just the new way to 'Think Different'!
      And all the little appledronez will do just that!
    • Sun.Surfin, on 10/12/2007, -5/+9@ dcbebop

      Freedom to do what on the iPod? Play songs/ video converted into Apple's supported formats and uh... wait, I think that's it! You have no freedom of customization on the iPod. I can't change the look, I can't change the feel, and I sure as heck can't put my own applications on it. Before you say "OMG iPod Linux!!!", I have a 5.5 80gb iPod Video, and Apple has managed to lock out Linux from being used thus far...
    • thecompkid, on 10/12/2007, -0/+0I can really relate to the ipodlinux thing. I posted an install vid on youtube and I get so many emails asking about the 5.5g. I honestly can't believe why apple would choose to eliminate iPL. What's the reasoning behind that? I know many people that buy iPods just b/c of the amazing software hacking you can do. I'm just happy I have a normal 5g and not a bastardized 5.5g with "amazing searching capabilities"
    • dcbebop, on 10/12/2007, -0/+3@Sun.Surfin

      Um, have you seen any of the addons available for the iPod line? Even Nike jumped on the boat and wrote an application that keeps track of your running progress.

      Aside from that, you get your choice of OS that it runs on, you're not stuck with just OSX. Not to say that iPhone won't work with windows, but still ...

    • undersky, on 10/12/2007, -9/+1no, MAC can only install OSX.
    • bibbles, on 10/12/2007, -0/+5ok undersky you win the stupid contest
    • Sun.Surfin, on 10/12/2007, -0/+1Once more, dcbebop, those things are very limited and expensive in what you can do with them. Apple has to approve it all, and functionality is limited. The Nike product you speak of is only available for the nano, and the nano doesn't appeal to my needs (especially the hard drive size... 8 gigs isn't enough). I can't put anything but OSX on it. Did you read my post?
  • InSeverance, on 10/12/2007, -1/+12I still think that the price point is high, too high for me to look at paying for v1 of the iPhone, yet I think Apple marketed the price point well at Macworld.
    With all the "wows" and the press coverage they have received they have created the perception that the technology us worth more than it may be / is (impossible to tell how much has been spent on the respective technologies as an outsider).
    However Apple will use the halo that they have created with the Keynote to justify such costs to consumers, regardless of it's physical and actual costs, and I would guess Google and Yahoo get a small cut somewhere a long the line.

    They will easily make a profit, but I think until all the costs of have been accounted for, or are at least close to being accounted for expect a large divergence between cost and price. Then, we may, or may not see a fall in price and increase in specs.
    • bonchx, on 10/12/2007, -0/+1It's disingenuous to only examine the build costs for the iPhone and ignore the costs of research and development, marketing, distribution, Cingular fees, and so on. So nobody should start ranting against Apple for charging a high price.

      I can't wait for June!
  • eschompthis, on 10/12/2007, -10/+24Apple you Son of a Bitch. I love my macbook though :)
    • Yashar, on 10/12/2007, -22/+12Which probably cost $650 to make.
    • Cronus6, on 10/12/2007, -4/+4Not even $650, all Laptops are overpriced right now due to high demand. (Yes this includes the $700 Dell type too)
    • bonchx, on 10/12/2007, -0/+1Yasher:

      But much more to market, distribute, provide tech support for, etc. People are being stupid if they only look at a manufacturing cost to determine a product's price.
  • royall64, on 10/12/2007, -3/+22OS X costs $7?

    And what about the built in speaker?
    • Ricky28269, on 10/12/2007, -16/+8Oh yes, didn't anyone tell you? That built-in speaker costs about $200. So, I guess this should be about right.

      [/joking]
    • m3mn0n, on 10/12/2007, -16/+4It shouldn't cost a cent.... how the hell can it be legit to charge yourself for a product you make so it can be included in another product you make.

      It's not different companies owned by the same one, it's Apple's OS X and it's Apple's iPhone

      I guess justification for cost inflation must be made some how... either that or this is total BS
    • FuManchuX, on 10/12/2007, -2/+7From an accounting viewpoint, Apple does have to charge itself for it; in order to run the books correctly.

    • CCB0x45, on 10/12/2007, -2/+6@m3mn0n
      Probably the dumbest comment I have ever heard... by charging yourself, do you mean paying your employees to do whatever work was needed to convert a large os which runs on a completely different platform, to a small lean OS on a new phone platform(PPC and Intel vs ARM). They don't charge themselves, they pay employees for the work... and that money doesnt come out of thin air, it comes out of the consumers pockets. That is capitalism. When I pay you 3 bucks a gallon at the gas station you work at, a few of those cents are going to pay your over all 7 dollars an hour, and I don't see you complaining about that.
  • Caiman, on 10/12/2007, -19/+27Capitalism! Apple could charge $750 for the iPhone and the sun would sitll be shining out of their arse for the groupies.
    • royall64, on 10/12/2007, -17/+13...what?
    • macmcrae, on 10/12/2007, -2/+1Yep - I like all of the early iphone comments in the "media" like" I would pay $800 for it easy - I just want it to synch with my mac". Thanx guys for the help. And I guarantee you it cost less than $100 to manufacture.
  • Obliterator, on 10/12/2007, -10/+7It is a bit strange considering that historically, the retailer's margins for Apple products have been razor thin. If you think that price is bad, wait till all the accessories come out for the phone that are marked up nearly 80%. The borg...er...mac collective will shed a tear.
  • KevinJim, on 10/12/2007, -19/+4Americans love to give away there money especially to apple and sometimes to m$. I NEVER gonna pay $599 for an iPhone or 280 Euros for an iPod... it don't worth it... non of these ( my opinion ). I don't now about the iPod but for sure the iPhone doesn't qualified the $599 and the apple logo dosen't say anything to me !
    • thegreyfox, on 10/12/2007, -6/+11I wanna live in your country, where u can use both US dollars and Euros to buy things. Must be nice.
    • firsttube, on 10/12/2007, -4/+1@KevinJim

      "Americans love to give away there money especially to apple and sometimes to m$. I NEVER gonna pay $599 for an iPhone or 280 Euros for an iPod... it don't worth it... non of these ( my opinion). I don't now about the iPod but for sure the iPhone doesn't qualified the $599 and the apple logo dosen't say anything to me !"


      ladies and gentlemen, Borat is back!
  • Gutterpunk, on 10/12/2007, -15/+13Something made by Apple or sold at the Apple Store has an inflated price?

    Say it ain't so!
    • afrayedknot, on 10/12/2007, -8/+3it aint so! [/lie]
    • bonchx, on 10/12/2007, -0/+1Well, it ain't so. Hell, Dell fanboys are still coping with the fact the Mac Pro is $1,000 less than the equivalent Dell workstation. Ouch!
  • monkeyrun, on 10/12/2007, -21/+2If Apple want to charge for their R&D, they better cut their Software/Hardware engineer up and ship them in the iPhone box.
    • pjleonhardt, on 10/12/2007, -0/+12Do you know how business works? EVERY company charges for their R&D..
  • cr125er, on 10/12/2007, -3/+43My thoughts are we need a ***** iPhone tab on the top of the page.
    • afred, on 10/12/2007, -2/+3lol, you comedic genius, you! rolling on the floor laughing my ass off collecting cat hair (because i have a cat living with me)
  • Tainek, on 10/12/2007, -13/+11this is the biggest problem i have with apple in general, i just refuse to pay a 20-30% markup on the rest of the market just because its apple

    my girlfreind and i both want macbooks, but here in the uk its £750 quid ($1500) for the low end models, i can get the same specs anywhere else for £450

    if any other phone manufacturer such as nokia made this phone, it would be 20-30% cheaper, i just wont pay that much to the "apple tax"
  • tonich03, on 10/12/2007, -18/+5Apple can **** my ****
    • royall64, on 10/12/2007, -6/+5Nice ****ing use of ****!
    • dcbebop, on 10/12/2007, -12/+2Ass only has 3 letters.
    • Darrelc, on 10/12/2007, -8/+3"Suck My Dick". Or maybe he meant "Arse"

      Tard.
    • D4r7h3v1l, on 10/12/2007, -0/+20No, they were "have" and "kids".
    • meatmcguffin, on 10/12/2007, -1/+5Apple can "rate" my "rack" ?
    • TheRedCoat, on 10/12/2007, -3/+0They could be "take" and "cash"
    • imightbewrong, on 10/12/2007, -2/+1 how about "have" my "third gen iPod and give me an iPhone for it! in order to gain consumer loyalty"
    • royall64, on 10/12/2007, -1/+1"Soviet" and "Union"
    • tonich03, on 10/12/2007, -2/+2Only 10 neg diggs means that some people did DIGG the comment, so yeah, Apple isn't all that. Like Alex from Diggnation said they take something, act like they were the first to think of it and then overprice the ***** out of it..that's apple.
    • bibbles, on 10/12/2007, -0/+0OH!

      I forgot to mention, all high end products have large margins because very few people buy them!

      If the iPhone cost $100 bucks less, and you that would make you buy it, YOU'RE A STUPID FURFAG!

      MOST people don't buy smart phones, MOST people aren't willing to pay for data plans, MOST people don't need any of that, MOST people aren't going to buy the iPhone...

      LUCKY THE IPHONE ISN'T AIMED AT TAKING THE SPOT OF THE RAZR YOU ***** WITS!
  • colincornaby, on 10/12/2007, -5/+20And software R&D is free?

    Using this logic computer games should be a $1 because they cost about 50 cents to burn and package.
    • broomett, on 10/12/2007, -5/+4While you are right, why do I get hte feeling that you broke a few keyboards pounding away at how ridiculous Sony was to be charging $600 for a PS3?
    • colincornaby, on 10/12/2007, -3/+10"While you are right, why do I get hte feeling that you broke a few keyboards pounding away at how ridiculous Sony was to be charging $600 for a PS3?"

      Don't get me wrong, the components in the PS3 are a steal for $600. But I think the PS3 is more power than the average consumer needs. Sony is shooting themselves in the foot by putting in such high end, expensive components.

      The iPhone is going for the market of people who are already willing to pay that premium for the phone. Apple already knows this version of the iPhone will be restricted to the upper 1% of the market, while Sony acts like everyone and their mothers will be buying PS3's.
    • zetsurin, on 10/12/2007, -2/+3"while Sony acts like everyone and their mothers will be buying PS3's."

      I disagree. It's the Digger who act like Sony are a failure if everyone and their mothers don't buy their products. They've hit 1.5 million sales (the fastest selling of any PlayStation now) from this unit that I was told countless times on Digg that nobody would want. Funny isn't it?

      Do all manufacturers of high end equipment 'more powerful than the average person needs' suck now?
  • Justinguder2, on 10/12/2007, -9/+23Why does everyone on digg defend apple?
  • mrwiggl3s, on 10/12/2007, -5/+6Factor in shipping, making the new machines, dev, shipping (postage + packing) new factories ect

    It adds up homegirl
  • kdmaster, on 10/12/2007, -1/+1the software devolpment is for the rest, losers
  • wilhoitm, on 10/12/2007, -6/+7Bull! That is how much a cheap plastic low quality PC clone of the iPhone would cost. They don't understand the "ART" of design! The paint on the Mona Lisa probably only costs a few dollars but the painting itself it priceless.
    • jcaino, on 10/12/2007, -10/+5im hoping thats sarcasm....but the shame is a lot of people probably actually -think- that.

      mona lisa = one of a kind, that's it, you drop it, burn it, you're hosed.

      iphone = massed produced, over-priced toy.
  • OMightyColumbia, on 10/12/2007, -1/+2looks like good economics to me, for apple that is
  • Brasky, on 10/12/2007, -13/+9I love how many apple fanboys are eating this ***** up and trying to justify the iPhone price, but bitch when the PS3 is $600. Not that I would ever buy a PS3 (FPS are only for PC!)

    I can already see this getting dugg down...
    • zetsurin, on 10/12/2007, -2/+3Yeah, I am shaking my head in disbelief reading a wide array of justifications for the price hike. Yet at the same time Sony taking a loss to the extent that the blu-ray drive IS actually free is somehow evil and horrible. Well, news flash: the PS3 is actually far more open that the iPhone.

      I am an owner of both Apple (typing on my MacBook and listening to my iPod right now) and Sony products, but you apple zealots are a disgrace.
    • meatmcguffin, on 10/12/2007, -5/+2$600 is a disgrace when you have a competitor at a higher standard (of gaming) at half the cost. If every console cost $600, no-one would complain.

      The iPhone has no direct competitor that is cheaper to *that* extent, and that's the difference.
    • zetsurin, on 10/12/2007, -3/+2"600 is a disgrace when you have a competitor at a higher standard (of gaming) at half the cost. If every console cost $600, no-one would complain."

      One could seriously argue that the PS2 provides a heck of a lot more than the XBOX360 at half the price. Your point is retarded and akin to premature ejaculation as you are calling the horse race over at the first 100 yards. You've seen the opening credits of the movie and you are comparing it's ending against an alternative movie. Could it be you were biased in your belief right from the beginning??? In case you aren't following I am talking about your premature conclusion of the PS3's capabilities based on a couple of ports which were originally written for a different console architecture.

      "The iPhone has no direct competitor that is *that* much cheaper, and that's the difference."

      *****. Every phone on the market is a competitor and they start from $0. Not everyone needs a smartphone and by your argument above there are other *phones* which are just as good if not better at being phones for FAR less than half the price.

      Your argument went pear shaped, can you see where?
    • meatmcguffin, on 10/12/2007, -2/+1"The iPhone has no direct competitor that is *that* much cheaper, and that's the difference."

      You're right, not everyone needs a smartphone but you can't suddenly pretend that the iPhone isn't one. iPhones *direct* competitors, and i was very careful with the wording, such as the windows mobile crowd do not start all that much lower in price than the iPhone does. You can compare the iPhone to ordinary phones but it would be an insult, which is why i didn't.

      And if i use the game console analogy, here's where your argument went pair shaped :

      *****. Every games console on the market is a competitor and they start from $10. Not everyone needs a PS3 and by your argument above there are other *commodore 64 tv plug and play sets* which are just as good if not better at being games console for FAR less than half the price.

      Can you see where? One of these things is not like the others.
    • StrawberryFrog, on 10/12/2007, -1/+2"The iPhone has no direct competitor that is cheaper..."

      WTF? I won't be able to buy it until September (June for you lot) and you don't think it has competition? It isn't even competition itself yet.
    • zetsurin, on 10/12/2007, -1/+1"*****. Every games console on the market is a competitor and they start from $10. Not everyone needs a PS3 and by your argument above there are other *commodore 64 tv plug and play sets* which are just as good if not better at being games console for FAR less than half the pric"

      Honestly, that is one of the most retarded responses I have read here on Digg. You said the iPhone has no competition. Then I indicated that it isn't the case. Then you copied what I wrote to somehow imply that I was the one saying that the PS3 has no competition. Honestly get your head out of your arse and try to remember the context of the discussion before losing yourself in one paragraph.
    • meatmcguffin, on 10/12/2007, -0/+1I actually wrote the videogame analogy because i misread your PS2 comment as PS3. Looking back, it didn't make much sense given that fact.

      As for the rest of it - the iPhone isn't competing with every phone on the market. It's competing with smartphones. People who buy ordinary phones won't buy the iPhone and people looking to buy smartphones will not buy ordinary phones.

      Given that domain, the iPhone's competition is still only plus/minus 100 dollars in comparison. There are no smartphones of the same standard that are half the price and that was the original point of the thread, wasn't it?
  • ciggwin, on 10/12/2007, -2/+3What happened to the iTouch mobile :-p
  • deadlierchair, on 10/12/2007, -1/+3Without a comparison to the average markup of other Apple products this isn't helpful. There are costs associated with R&D, advertising, selling/shipping the parts, etc that we cannot take into account unless we have something to compare to.
  • jedikd, on 10/12/2007, -14/+4Apple does not sell items for a profit, in fact, they take a loss on every item they sell. The only company that makes a profit is the evil greedy microsoft. Marked as inaccurate
    • Zanwar000, on 10/12/2007, -2/+3everything you just said is inaccurate
    • jedikd, on 10/12/2007, -0/+1I was being sarcastic, so yes that would make what i just said inaccurate
  • scabbers, on 10/12/2007, -6/+131. Slave wage workers in China

    2. Rabid fanboys with trust funds

    3. Profit!

    • broomett, on 10/12/2007, -5/+4I wouldn't say it is trust funds. Some earn their own money. It is just that paychecks go a long way when you know you will never have to spend any money on dating and condoms.
  • bonexaw, on 10/12/2007, -1/+9$250 is about right for this. For standard products the COG (cost of goods) as shown is around 1/4th the retail price.

    Say something costs $1, generally a company wholesales it for $2, and then retails it for $4. Apple being the retailer and wholesaling to itself, a 2x multiplier (3x if you add in the $200 or so (spec) Cingular is giving them for the 2 year contract) is about right.

    Yes I know, it's SHOCKING that Apple is making money on its phone. Oh wait, they aren't selling an XBOX or PS3 where they make money on games they sell. They have to turn a profit out of the box.
    • ScottMaximus1, on 10/12/2007, -3/+1You mean a company...that....makes...a...pppprroffit?


      Whaaaa?
    • chrisutley, on 10/12/2007, -3/+2I imagine Apple will get some sort of incentive from Cingular for every new activation tied to an iPhone too. Not that there's anything wrong with that. Oh the evil capitalists! (cough, cough - rolls eyes)
    • zetsurin, on 10/12/2007, -0/+1"Oh wait, they aren't selling an XBOX or PS3 where they make money on games they sell."

      That's where you are dead wrong. There is a damn good reason why Apple won't be allowing you to install your own software on 'your' iPhone. You will be charged for everything imaginable from ringtones to simplistic personal finance management apps. And then guess what else? That's right GAMES. Just like the iPod.

      I can just hear the words now "Available TODAY on the iTunes store".
  • Rchapman8, on 10/12/2007, -6/+2What do you want apple to be like Sony and lose cash on every unit?
    • klawz, on 10/12/2007, -1/+1If Apple was also a Cellular provider, they could follow this model. As it is, Cingular is subsidizing these phones, and the price is till 500-600.
  • brlittle, on 10/12/2007, -2/+7This is news?

    I take it you guys all saw the launch prices on, oh, I don't know...the RAZR, maybe? Care to hazard a guess on Big Moto's profit margin on those?

    Of course, dissing Moto doesn't score you the kind of points with the cool kids that hating on Apple gets, so I suspect I see where this is pointed.
    • broomett, on 10/12/2007, -1/+1Except how soon before the RAZR came way down in price? You think that will happen with Apple?
  • Jakesterama, on 10/12/2007, -1/+5labor anyone? (for you in the UK "labour anyone?")

    If you broke it down into the elements, I bet there is only $5 worth of metal and plastic in the thing, or in most products now-a-days, that doesn't mean that those are the only costs involved.
    • tensvb, on 10/12/2007, -0/+4Good point, melt the plastic and metal and hey, iPhone costs only 5$!!! Greedy Jobs....
  • LilRabbitFooFoo, on 08/11/2008, -0/+3What I'm thinking is "why am I still seeing these inane "every little worthless bit of information on the iPhone" articles even though I specifically had to filter out the entire Apple section from my digg?" Ahem.
  • jeffrehl, on 10/12/2007, -1/+4Only 30 bucks for the screen? I don't buy it.
  • hazlett, on 10/12/2007, -1/+7Now let them break down the cost of "making" a loaf of bread, parts probably only cost pennies........then realize, please, that cost has NOTHING to do with price.

    Anyone who thinks cost should equal price needs to learn some basic economics.

  • Denatsu, on 10/12/2007, -2/+0Didnt you see the "One More Thing..." sketch from Attack of the Show? Who cares what the price is...you dont f*ck with Steve Jobs. XD
  • kdmaster, on 10/12/2007, -2/+9with this logic, microsoft vista costs only $1 to make.

    take that, "dell is swell" people
    • dancrew32, on 10/12/2007, -2/+1you can get it for free... cough HACKED VERSION TORRENTS cough..
  • Kaswam, on 10/12/2007, -5/+3They could charge $800 for it. People would still be willing to pay for that beautiful apple logo.
  • InfinitySnatch, on 10/12/2007, -2/+3I'm going to allow this.
  • monkeyrun, on 10/12/2007, -7/+5I think the majority of the Digg community wants communism.
  • Stevethegreat, on 10/12/2007, -0/+2I'm not questioning the accuracy of the estimated price, it is understandable that it can be totally irrelevant to the actual building cost, but even if it is really accurate you don't have to be saddened about it, Apple has a history of overpricing its products. It is known that Apple makes most of its money from the hardware (that's why they follow close architecture), as we speak not a single Apple product in the shops is close enough to its actual pricing and I'm speaking for a margin of about 50% or more from the actual building cost.
  • carlaudet, on 10/12/2007, -2/+1Perhaps someone at Apple will get a small memo concerning his career options tomorrow... =)

    (according to this: http://arstechnica.com/journals/apple.ars/2007/1/15/6630 )
  • wordsthatendini, on 10/12/2007, -3/+5OMG!... A company making a profit.
    The iFanboys need to chill the ***** out.
    The number 1 rule in business is Make A Profit. Could be from anything; selling shoes, building Ipods whatever it is the basic fundamental principle of anyone going into business is to make money. Its cool that Apple innovates but its all about the money.
  • tacklebox, on 10/12/2007, -2/+2I like how they're starting the storage size small like they did on the ipod to upgrade the size every year to get the sheep to upgrade. ipod isnt even the best music player out there, but for some reason people are too stupid to shop around.
  • carbog, on 10/12/2007, -0/+3Material costs are only a fraction of all the costs that go into making the phone. What about production, advertisement, sales, labor, R&D, ect.
    • monkeyrun, on 10/12/2007, -5/+1"What about production, advertisement, sales, labor, R&D, ect."

      I don't see them in the iPhone.
  • imightbewrong, on 10/12/2007, -2/+3lets not forget the cost of hired hit men to ensure that nobody from apple leaked secrets about it
  • FlaWiio, on 10/12/2007, -0/+1And what about the cost to build a pair of Nike shoes and what the price you pay for them?
  • computermatt, on 10/12/2007, -0/+2uh, it's gone
  • chrisutley, on 10/12/2007, -3/+4This place is going to hell thanks to the socialists and fan boys alike.

    Apple doesn't force people to buy their products. Their prices are obviously fair, or the market would put them out of business.
    • broomett, on 10/12/2007, -2/+2Aside from the iPod, the market often DOES put Apple products out of business.

      Rememeber how Steve Jobs and the fanboys said that Bose was going to get killed by the iPod HiFi last year? If not, just do a quick search on Digg and you will see LOTS of comments after that piece of garbage was introduced saying that Apple just put Bose out of business.
  • Crypty, on 10/12/2007, -1/+2There is a group of people in the market who will pay outrageous prices just for that high-end apple brand, and hell, even plenty people who follow the "If it costs the most it must be the best" rule.
    • chrisutley, on 10/12/2007, -1/+3"plenty people who follow the If it costs the most it must be the best" rule."

      What are you talking about? That's clearly not enough people to achieve the success Apple is having in their Mac and iPod businesses. Why do the detractors need to come up with excuses for Apple's success? Ultimately they obviously have desirable, quality products or they couldn't operate as they do.
  • hansamurai, on 10/12/2007, -2/+6Bury, wrong topic. File under Apple so I don't have to see it.
  • Clevinger, on 10/12/2007, -0/+5http://duggmirror.com/tech_news/iPhone_Costs_Only_245_83_to_Build/iphonecosts.jpg

    That's all that Duggmirror gives, I checked.
  • dancrew32, on 10/12/2007, -2/+3Does anyone else find the word "Only" in relationship to "$245 bucks" to be really funny?
  • Gromkii, on 10/12/2007, -5/+2How could Steve Jobs possibly be so incredibly cool if he didn't steal all your monies? One step up from thuggery.

    Awesome!
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