Research company iSuppli religiously tore down the iPhone 3GS as it did for previous high profile smartphone and gave a rather detailed estimate of the cost of the iPhone.
Based on the physical analysis of the 16GB model, the firm says that it costs around $178.96 to build the new iPhone, compared to the $174.33 the older version cost - that only $4 extra. The iPhone 3GS shares many of the components of the iPhone 3G which means that Apple could have driven down the price of the parts.
The 16GB NAND Flash memory from Toshiba grabs the biggest portion of the overall cost at $24. The 3.5-inch LCD screen costs only $19.25 to which the touchscreen assembly adds another $16.
The ARM Cortex core application processor drives the price up by $14.46. Other parts includes the camera module ($9.55) while the communication hardware costs around $13.
Apple has also managed to replace a number of components by a single package that not only costs less but is also easier to implement and consumes less power.
iSuppli's teardown did not include the price of research and development as well as the software and the accessories. Back in November 2008, iSuppli put the cost of the then-new HTC G1 Android smartphone at $143.89 back then.
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The iPhone 3GS costs around £130. Yet some etailers are planning to sell it for a staggeringly high £899.99, that's seven times the price. What's more, the price difference between the 32GB and the 16GB model costs Apple around £20, yet it charges nearly £100 extra for the additional 16GB memory.
The iPhone 3GS costs $172.46, says iSuppli
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