Cost of the iPhone 3GS

If this Indian website is right, Apple has certainly taken the gloves off in its fight for smartphone market share.

The basic facts:

Bill of materials = $172.46
Manufacturing cost = $6.50
Total cost before distribution = $178.96

AT+T Price of  iPhone 3GS
16GB version = $199
32GB version = $299

So if the Tech2 site (and it is confirmed by Information Week)is right, only on the 32GB version of the iPhone does Apple make a big chunk of change independent of  the AT&T subsidy. But it is important to note that all the extra parts, packaging, distribution and other costs have not been factored into the costs reported  here. And with the $100 Apple 3G using essentially the same parts and manufacturing base – the result is that this is  pretty aggressive, down-the-learning curve pricing for the iPhone product family.

However, Apple has to be price careful, because the Pre is simply better for its multitasking in the view of many users and and market leader RIM is rumored to have more smartphones on the way while Google Androids are scheduled for Fall intros.  Will iPhone’s huge Apps lead and agressive pricing allow it to move up in market share ? Well the exclusive with AT&T may be the big decider there.

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