iSupply worked its magic on the new iPhone 3Gⓢ and found it only costs a few bucks more to manufacture than last year's 8GB iPhone 3G that it replaces. Interestingly, the iPhone they tore apart contained Flash memory from Toshiba where Apple generally gets its Flash from Samsung (and had a multi-Billion dollar up front deal with the vendor). The other three biggest changes were the new Arm Cortex Samsung processor, new autofocus 3-Megapixel camera and the Broadcom Corp. single-chip Bluetooth/FM/WLAN module. The latter replaces two chips.
"The entry-level, 16Gbyte version of Apple Inc.’s new iPhone 3G S carries a Bill of Materials (BOM) cost of $172.46 and a manufacturing expense of $6.50, for a total of $178.96," said Andrew Rassweiler, director and principal analyst, teardown services, for iSuppli. "This is slightly higher than iSuppli’s estimate of $174.33 for the original 8Gbyte iPhone 3G based on pricing in July 2008. Although the retail price of the 16Gbyte iPhone 3G S is $199, the same as for the 8Gbyte version of the original iPhone 3G, the actual price of the phone paid by the service provider is considerably higher, reflecting the common wireless industry practice of subsidizing the upfront cost of a mobile phone and then making a profit on subscriptions."
Breakdown chart below:

Comments
nice. Better iPhone, same
nice. Better iPhone, same price.
hows did you make the S with
hows did you make the S with the circle around it? Is this the new branding for the iPhone 3GS?
I see that someone reads the
I see that someone reads the comments and someone doesn't, as someone followed my advice while the other one looks baffled and confused... Just kidding.
Though they may have made it using the Edit-->Special Characters... or command+option+T. From there, make sure the you have the popup menu at the top left set to "View: All Characters", in the left column toggle "Symbols" so you can see its members, choose "Enclosed Letters", scroll down and you will see the ones with circles around them. Double click and they will be added to the field you are typing in: ⓢⓞ_ⓒⓞⓞⓛ. Ⓣⓗⓐⓝⓚⓢ_ⓐ_ⓑⓤⓝⓒⓗ.
They could have just cut and pasted it from a previous comment I made in a different article where I was joking how I did it (even though I never had ;))
http://9to5mac.com/iPhone-3G-S-iPhone-3GS#comment-39364
So Thanks for the credit.
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That said,
Love the information and glad I didn't have to buy one, rip it apart and then do all that research. You may want to check out an article on Toshiba and NAND and earnings, as it gives some information and insight as to why Apple may have done this. (strategic play to keep competition amongst the NAND producers? given supply and demand dictate market prices a bit, potentially not a bad move for Apple's margins and price points on their products)
http://www.reuters.com/article/marketsNews/idINT10256420090624?rpc=44
Packaging, shipping and shelf costs are reduced with the new phone, so remember to add those in. The photos I saw showed a considerable package drop, similar to the CD/DVD case size reduction in previous years.
good luck with those Circled S's and take note that they are searchable with normal letters (i.e. if you search for bunch, it will find the one above with circles around all the letters too)
the (s)
is part of the font, look it up :)
With all these teardowns how
With all these teardowns how can we not know the actual PowerVR SGX model that's present on the 3GS? All we have until now is speculation about pixel fill rate and polys per second. If we knew the actual model of the GPU, we could have more objective data.
I thought the initial leaked
I thought the initial leaked specs of the 3GS showed that it only had 256MB of RAM. The chart seems to indicate that it is 512MB.
Has that been confirmed elsewhere?
Why?
Why does the iPhone cost but $33 more to make than the iPod Touch 2nd generation yet they charge the carriers $500-600 for it? Why do the carriers allow this? I guess I do not know why the carrier must support a product that is marked-up by $400 in some cases. I wish there was an option for a contract free iPhone 3GS for $399 as that is more in-line with the Apple profit expectations even condiering the R&D which for the most part relating to hardware is mainly complete but the R&D on software is different but doesn't that hold true for the iTouch as well? They are basically identical sans the modem and GPS - both of which are only a few dollars to purchase per that chart listed above.
I have been called many things and dense in one but how can the carriers justify $600 for a $177 phone in parts? That is well above a similar product and I cannot figure out why the carriers allow this to continue?
D
Might just build one :P
Anyone wanna build one and see if we can get it to work properly :p