The iPhone 4 is currently available for $199 or $299 for the 16GB and 32GB models, with a new 2 year contract from AT&T. Looking at these prices, it would seem that Apple is being quite generous, almost giving away the iPhone 4 and not making any profit. However, without a new two-year contract, Apple cannot offer the low price points because they are not subsidized by AT&T. The unsubsidized prices are $599 and $699 for the 16GB and 32GB models. So is Apple really just breaking even? When looking at these figures, it is quite evident that Apple is making a pretty penny on its new iPhone 4.
Here is a breakdown of some of the various costs of parts that make up the iPhone 4
- 3.5-inch Retina Display – $28.50
- A4 processor, the heart of the iPhone 4 – $10.75
- Gyroscope – $2.60
- Accelerometer – $0.65
Think these prices are low? They are very similar to that of the iPhone 3GS. When it was first released, the cost of the iPhone 3GS’s parts were around $179. Since then, parts cost around $134. Despite this decline in manufacturing costs, Apple did not lower the price of the iPhone 3GS, which stayed at a constant $99.
Price mark-up aside, not many phones on the market can offer all of the features on the iPhone 4 – at least straight out of the box.