Apple has managed to keep down costs in its latest iteration.
Teardown experts iSuppli has revealed that Apple, like most other manufacturers, has managed to keep the manufacturing costs down with the current iteration of the iPhone. The manufacturing cost is down by as much as $53. In fact, the whole kit (minus the software) costs Apple a measly $174.33. This added with the estimated $50 royalty that Apple shells out for each iPhone, works out to a grand total of $224.
How did they manage to keep the costs down in spite of the addition of the 3G and GPS chips? Simple. They chose to stick with the same Samsung processor as before, the circuit board is now a single, durable affair unlike the two tightly connected ones earlier. As for the battery, it is no longer soldered to the device. That's good news for technicians who help you replace your iPhone batteries!
That's about the hardware. In terms of compatibility with non-US networks, Apple has included the Infineon chipset that will ensure that the iPhone works in markets like Japan and Korea where the previous iteration would have been incompatible.
Considering the unsubsidized cost of about $499 for the 8GB version, Apple is assumed to get almost $300 from AT &T for each customer who purchases the phone at $199. That is a substansial 55% profit margin before accounting for marketing and software!