4 ms·

I've been wondering about this, and I guess this is a good a thread to ask as any: Why does the iPhone cost $599? The iPod touch, with similar components, cost

I've been wondering about this, and I guess this is a good a thread to ask as any: Why does the iPhone cost $599? The iPod touch, with similar components, costs $199. Are the phone chips that expensive, or are there licensing fees, additional regulatory requirements, etc?

mseebach 17y ago
Simple: Because Apple can get people to pay $599 for the iPhone. More specifically, they can get people to sign up for $XX/month plans, which means Apple can get AT&T to pay them $399 for the hardware. There's no such deal to be made for the touch, thus it's $199. As for the components, I'd be surprised if an iPhone off of the line in China would cost much more than $50.
- scw 17y ago
  The components in a 16GB 3GS are estimated to cost $178.96: http://blogs.barrons.com/techtraderdaily/2009/06/24/apple-iphone-3gs-materials-cost-similar-to-last-version/ http://blogs.barrons.com/techtraderdaily/2009/06/24/apple-ip...
  - protomyth 17y ago
    Wasn't the old rule of thumb that you price manufactured goods at 3x the production cost?
    - nitrogen 17y ago
      I've seen 5x used in pro audio from BOM to retail.
- there 17y ago
  Simple: Because Apple can get people to pay $599 for the iPhone. apple can get people to pay over $1000 for an iphone. those phones that are sold unlocked in other countries that aren't subsidized go for well over $599 on ebay: http://shop.ebay.com/i.html?_nkw=factory+unlocked+iphone+3gs&_sacat=0&_trksid=p3286.m270.l1313&_dmpt=Cell_Phones&_odkw=unlocked+iphone&_osacat=0 http://shop.ebay.com/i.html?_nkw=factory+unlocked+iphone+3gs...