3G iPhone: cheap version of original

Apple’s new 3G iPhone is in reality just a cheaper-to-make version of the original iPhone with a few added features.

This is the conclusion of expert electronics analyst, iSuppli, who took the iPhone to pieces to work out how much each unit costs to manufacture.

iSuppli estimates that the 3G iPhone costs $174.33 per unit for component parts and manufacture, $53 less than the 2G iPhone, which cost Apple $227 per unit in manufacturing costs.

The estimate excludes software development, shipping, distribution, and packaging costs.

iSuppli’s findings are consistent with Apple’s business target of capturing a larger market share by selling the iPhone at a lower price.

Apple pays $50 in IP royalties for every iPhone shipped, bringing the total cost per unit to $224.33.

The iPhone is sold to telecoms providers for $499, giving Apple a profit margin of 55%.