Last month, the researchers from iSuppli have announced their conclusion about the production costs of the 3G iPhone. However, their analysis was performed based on the information provided by Apple and they promised that another teardown analysis will be performed as soon as the 3G iPhone will be released.

According to their new findings, the initial estimation released last month was very close to reality. After the virtual teardown, iSuppli concluded that Apple spends $173 BOM for each phone.

iSuppli’s Teardown Analysis Service on July 11 obtained an iPhone 3G and commenced a dissection in order to identify component suppliers, as well as to determine preliminary part and system costs. Per the teardown analysis and subsequent examinations by analysts, iSuppli has issued a preliminary estimate of $174.33 for initial production costs for the 8Gbyte iPhone 3G.

At $174.33, the BOM and manufacturing cost of the new iPhone is markedly less than the $227 that iSuppli estimated for the first-generation, 8Gbyte 2G iPhone in June 2007. While using a new design, the iPhone 3G really represents a refinement of the original iPhone 2G,
“The addition of 3G wireless capability represents an evolutionary design step for the iPhone, not a revolutionary one,” said Andrew Rassweiler, teardown services manager and principal analyst at iSuppli. “iSuppli believes Apple aimed for a more cost-effective design for the 3G iPhone compared to the 2G, in order to lower the retail price—which will allow the company to seed adoption and to capture maximum market share now—while the company still has buzz and a perceived differentiation relative to its competitors.”

iSuppli said that the iPhone 3G’s use of an Infineon Technologies AG baseband chip that supports the HSDPA, WCDMA and EDGE air standards, plus the integration of three separate TriQuint Semiconductor Inc. tri-band WCDMA Power Amplifier Modules (PAMs), reflects the fact that the iPhone 3G is suited for sale worldwide.

Also a big improvement reported by iSuppli is that in the new model the battery is not soldered into the phone as it happened in the initial model.

Beyond the $174.33 BOM and manufacturing cost of the iPhone 3G, Apple is spending an estimated $50 on IP royalties per unit shipped. With the 8Gbyte version retail-priced at $199, and the estimated $300 subsidy paid by AT&T to Apple for each unit, Apple is selling the product at a price of $499, and spending $224.33 to produce each one. This gives Apple a BOM, manufacturing and royalty margin of 55 percent for each 8Gbyte iPhone 3G unit sold.