iPhone build cost pegged at $223

Apple's iPhone 3GS carries as manufacturing cost of US$178.09 ($223), according to analyst estimates.

A recent 'teardown' analysis of the new iPhone handset found that the hardware components in the 16GB version of the device carried an estimated cost of US$172.46.

The cost of manufacturing each unit was pegged at roughly US$6.50 per unit.

In the US, the 16MB iPhone 3GS retails at a cost of US$199 with a 2 year contract with exclusive carrier AT&T.

Users who do not sign up for the contract must pay US$399.

Vodafone Australia customers will be able to buy the 32GB iPhone 3G S from Vodafone for $1129 up front, the 16GB model for $929 and the 8GB model for $759.

Optus is also expected to offer standalone prices, but not for a few weeks.

The higher prices being charged for the phone without a contract could reveal just how carriers expect to make their profits from the device.

iSuppli principal teardown analyst Andrew Rassweiler noted that Apple was likely receiving a higher price from the developers than what is being charged for the device with a service contract.

"This is slightly higher than iSuppli's estimate of US$174.33 for the original 8GB iPhone 3G based on pricing in July 2008," Rassweiler said of the latest estimate.

"Although the retail price of the 16Gbyte iPhone 3G S is US$199, the same as for the 8GB 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."