Jul 16

iPhone 3G - Real Price

I know we talked about this before, but the latest info on the topic seems to clear things out once and for all. What topic? Well, the real value of the iPhone 3G, of course! I know a lot of people are interested about the iPhone 3G price, but how many of them would be interested in knowing the real value of the device they are spending their money on? Most of them, I am sure of that!

According to the latest reports, the iPhone 3G is worth only $174.33, when talking about pure manufacturing costs, $53 less than the old iPhone, despite the fact now it has 3G and GPS chips included. Anyway, this shouldn't come as a surprise, since the Flash memory is much cheaper now, and the back of the device is no longer made out of aluminium, but plastic.

Andrew Rassweller, analyst with iSuppli, thinks that "Apple aimed for a more cost-effective design for the 3G iPhone compared to the 2G, in order to lower the retail price, which will allow the company to seed adoption and to capture maximum market share now—while the company still has buzz and a perceived differentiation relative to its competitors." Aren't they all aiming for lower production costs? So much for stating the obvious...

So...how did they do it, after all? Well, while the iPhone used two tightly connected circuit boards, the iPhone 3G uses only one board, while the battery is no longer soldered to the smartphone. The best part of the new iPhone is that compatibility with non-US networks has been expanded as much as possible, the Infineon chipset now supporting WCDMA phone networks, used in Japan and Korea, so the iPhone 3G is able to go "where no iPhone has gone before!"

The licenses for patents and other intellectual property costs are estimated at $50, so a 55 percent profit margin for Apple, before adding the marketing and software parts in the equation doesn't look bad at all, don't you think? Need an advice regarding Apple shares? "Buy, buy, buy!," I guess that should be obvious by now...