Why does an unsubsidized iPhone cost $300 more than an iPod?

3 pointsfoomarks2 comments

The iPhone 3G 8gb = $500 unsubsidized

iPod Touch 8gb = $200

Do the raw materials and the technical support costs for the mobile component in an iPhone really value at an the extra $300? What other costs are going into this (advertising too?)?

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The best way to find out is to look at the iSuppli teardowns.

iPhone 3GS 16GB teardown: http://www.isuppli.com/News/Pages/iPhone-3G-S-Carries-178-96...

I'm having trouble finding a teardown with cost analysis of the iPod touch, but it seems like even with a 50% margin like Apple likes, it's not in the raw materials.

Seems simple: Because that is what the market will pay.

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