Apple 'makes $420 on each iPhone sold'

Industry watcher iSuppli says that the new iPhone 3GS costs Apple just $178.96 to build. The 16GB iPhone 3GS only costs the company three percent more to make than last year's model, with a bill of materials totalling $172.46 plus $6.50 in manufacturing costs, says the company.

Apple's US carrier, AT&T, sells the 16GB iPhone 3GS at a subsidized $199, but industry watchers reckon that AT&T and other carriers cough up around $600 per phone. In the UK, Apple's carrier of choice, O2, sells a pay as you go 16GB iPhone 3GS for a whopping $719.85.

"The actual price of the phone paid by the service provider is considerably higher," says iSuppli's Andrew Rassweiler. "Reflecting the common wireless industry practise of subsidizing the upfront cost of a mobile phone and then making a profit on subscriptions.

Apple claims it sold a million iPhone 3GS phones in the three days following its launch, which would equate to a cool $420 million profit if iSuppli's numbers are accurate.

(Via TG Daily)