USA: The new
iPhone 3G sports an evolutionary design that favors cost reduction instead of cutting-edge features, supporting Apple Inc.'s goal of expanding its market share and achieving a worldwide presence for the product, according to a physical teardown analysis conducted this weekend by iSuppli Corp.
iSuppli's Teardown Analysis Service on July 11 obtained an iPhone 3G and commenced a dissection in order to identify component suppliers, as well as to determine preliminary part and system costs. Per the teardown analysis and subsequent examinations by analysts, iSuppli has issued a preliminary estimate of $174.33 for initial production costs for the 8Gbyte iPhone 3G.
The figure consists only of the iPhone 3G's combined Bill of Materials (BOM) and manufacturing expenses. The total doesn't include other costs, including software development, shipping and distribution, packaging and miscellaneous accessories included with each phone.
iSuppli's cost estimate is nearly identical to the $173 BOM predicted in iSuppli's virtual teardown issued to the public in late June.
Cost considerations rule in new iPhone
At $174.33, the BOM and manufacturing cost of the new iPhone is markedly less than the $227 that iSuppli estimated for the first-generation, 8Gbyte 2G iPhone in June 2007. While using a new design, the iPhone 3G really represents a refinement of the original iPhone 2G, according to iSuppli.
"The addition of 3G wireless capability represents an evolutionary design step for the iPhone, not a revolutionary one," said Andrew Rassweiler, teardown services manager and principal analyst at iSuppli. "iSuppli believes 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."
The iPhone 3G's use of an Infineon Technologies AG baseband chip that supports the HSDPA, W-CDMA and EDGE air standards, plus the integration of three separate TriQuint Semiconductor Inc. tri-band W-CDMA power amplifier modules (PAMs), reflects the fact that the iPhone 3G is suited for sale worldwide.
