One thing I saw missing from all the comments and cost breakdowns is how I see the major component of the iPhone: software. The comments on the Economist seemed

One thing I saw missing from all the comments and cost breakdowns is how I see the major component of the iPhone: software. The comments on the Economist seemed to be along the lines of: "see how stupid the American company is... outsourcing everything to Asian companies who are going to steal their ideas and eat their lunch". The second largest component? Industrial design. Another factor not to be discounted. And Apple has some of the best in the world.