updated 07:40 am EDT, Wed June 24, 2009
iPhone 3GS iSuppli Costs
Apple's newest iPhone actually costs slightly more to make than the older version in spite of the more modest update, iSuppli says. The iPhone 3GS' total bill of materials amounts to $178.96 for a 16GB model, or slightly more than the previous $174.33 of the 8GB iPhone 3G. Some of the cost difference is attributed to recent rises in the prices of NAND flash memory; although 16GB costs less to make than it did a year earlier, a small rebound due to economy-driven supply cutbacks means Apple has had to absorb some costs to double its storage.
This year, the memory is one of the more expensive components of the device; the 16GB chip package has a raw cost of $24 while the 32GB package costs $46.
Other components are trade-offs. Although the screen price has dropped a dollar to $16 even with the oil-resistant screen, the faster, Samsung-made 600MHz ARM Cortex A8 processor is a similar amount more expensive than the 412MHz ARM11 chip from the year before. The next most expensive part is a $13 cellular baseband chip from Infineon, which has been present in each iPhone since launch.
Notably, the 3GS makes an important change in the non-cellular wireless chipsets provided by Broadcom. While a small $1.60 controller from the 3G is gone and has likely had some of its folders duplicated, a more advanced $6 component is in place that supports Bluetooth and Wi-Fi together; it likely also incorporates the Nike+ transceiver functions. That same chipset was used in the LG Renoir (KC910) and, notably, includes an FM radio. However, Apple is unlikely to enable FM and it's possible Broadcom may have permanently disabled the FM in return for a lower price.
Additional parts in the iPhone 3GS include the new magnetometer (digital compass) from AKM Semiconductor, a Cirrus Logic audio processor, an accelerometer from STMicroelectronics, a power management unit from Dialog Semiconductor and a mystery Texas Instruments chip.
By contrast, the Palm Pre is believed to be less expensive to make despite having a similar $199 price tag as a 16GB iPhone 3GS, owing partly to the reduced 8GB of storage, smaller screen and absence of parts like the compass. However, Palm likely isn't able to push the price downwards as Sprint can't necessarily offer as heavy a subsidy on the up-front price as AT&T can on the iPhone, which is more likely to sell in large numbers and offset its costs through data plans.