Its weird, you sound like you think you know what you’re talking about but then every sentance you wrote is made up incorrect nonsense. Way to go!

Also, a product is only worth as much as someone will pay for it. How many millions have these things again?

Haha, good lord.

Actually I think the rull retail phone price UNSUBSIDIZED is around $600.

Lets face it, there is a lot of profit in an outright purchase (which is still locked to ATT/Rogers in North America).

No one knows what ATT/Rogers pays for PER handset, but I expect Apple to make at least 100% profit ($359/device) for bulk purchases. (I don’t begrudge them this by the way).

ATT is alleged to have a continuing revenue sharing agreement out of subscription fees. Maybe Rodgers too. Apple might give up some handset profit for a piece of long term revenue stream. Or they might get this to justify free OS upgrades.

What would iPhone 3GS cost if it were manufactured entirely in the US?

Icebike is right someone else really did all the R&D for Apple. It’s the same as gathering known parts to build a hackintosh. Someone else already did all the work. Apples real R&D is in the OS and not hardware, because they go to their suppliers and say “we need a thus that can function to these specs” The supplier then eats the cost of R&D because they will make it back through volume.

Stop the spin and admit the only reason to justify the over inflated full price is to make Apple happy for the money they trade for favorable press perhaps. Just maybe. Even Apple knows they have to do some serious marketing to get a quater of the volume from the new model of the models before. The public is getting wise to the needless mark up.

Let’s try to agree that it’s worth $300 heck even $400, but not $700 +

The R&D was paid off by the First Generation phone.

Upgrading to the 3G wasn’t even a processor change, so most of the work was integrating a couple more radios (easy because the chip designer companies (like Infineon) essentially do most of this work with/for you). Take out one radio chip, slap in another, adjust software drivers to work. (Remember, this software is basically BSD so drivers are modular).

3Gs required a whole new CPU and Video chip. Those two items represent a much bigger job.

But as we have discovered, not much else in the way of hardware changes. Compass,(new) Camera (out with old, in with new), Memory (same size chip, larger capacity, zero engineering changes). The basic design remained the same. The basic OS gained only tweaks here and there added Apps for Camera.

Certification of the device, (take it from someone who has been thru this many times) is NOT a big deal, and NOT expensive – less than 10 grand and 4 days start to finish. There are companies that specialize in this. You hire one, they put it in their test chamber and put it thru the paces in one afternoon, boilerplate up a report, log into the FCC and submit the paperwork all on line.

Apple is STILL reaping the rewards of their hard work on the 2G. (As well they should).

Granted Apple has a development staff Payroll, physical plant, test labs to pay for. They have a software team, and a hardware team, and a separate App store team which they subcontract to the Mormon Church. (Ok, just kidding about that bit).

That hardware team is not that big. Doesn’t need to be. ~20 people. High paid, but not many. Software team, bigger, cheaper guys, kernel hackers and Application people. Maybe ~50 people and associated staff.

But we are no longer talking about Billions for each new rev of the hardware. Millions. 10s of Millions. Worst case, low 100s of millions.

Lets not go overboard on this R&D estimates.

Agreed. Useless post. It’s clearly stated that it doesn’t count the cost of of everything out with the price of the components themselves.