Apple's iPhone Brings Margin Magic

SAN FRANCISCO - Apple's(AAPL Quote) upcoming 3G iPhone may cost about $173 to make, giving the company a great shot at a high-margin hit.

Industry research firm iSuppli, which performed a virtual teardown of the 3G iPhone, said a bill of components used in the device will likely mean Apple's profit efficiency will outdo the earlier version of the iPhone as well as its iPod music player line.

Apple's iPod and iPhone products are typically priced about 50% more than their bill of materials, said iSuppli.

"At a hardware bill of materials and manufacturing cost of $173, the new iPhone is significantly less expensive to produce than the first-generation product," said Jagdish Rebello, director and principal analyst for iSuppli in statement. ...