Submitted by Chad Shmukler on
Probably. An industry analysis firm named iSuppli recently performed a teardown analysis on BoM (bill of materials) costs involved with the iPhone, added estimates on royalties and other costs Apple will incur, and have estimated that that iPhone will cost Apple roughly $280 to make. At that price, there's plenty of room for Apple to make $200-$300 profit on each unit they sell.
The estimate has had it's critics, however. One of the most essential parts of a teardown analysis is having a device to, well... teardown (take a part and analyze each individual part). Obviously, with the iPhone unreleased, iSuppli did not have an iPhone to teardown. This ads, some say, a great deal of speculation to the iSuppli BoM estimate. Specifically, many critics are concerned that iSuppli is greatly underestimating the costs of the LCD panel that iPhone uses. The source and technology behind this panel is not fully known, therefore making costs difficult to estimate.
You can find a detailed breakdown of iSuppli's teardown here.
Accurate or not, the estimate has been receiving a lot of negative attention from the press. We're not sure why. Apple has enjoyed similar product margins on the iPod for years without turning anyone's stomach.