Why the iPhone 3GS Doesn't Cost Apple $179

iSupply gets a lots of headlines, like this one from Reuters, guestimating the raw component costs of popular gadgets like the iPhone 3GS. And good for them.

Media literacy 101, however, demands we remind again that the iPhone 3GS didn't pop into consumers' hands fully formed from a Star Trek transporter or the toes of the frost-giant Ymir (Bing it). It cost money to research and develop both hardware and software, to design and prototype, to test and certify, and it cost money to manufacture, to ship, to stock, to advertise, and to sell.

Even if we stick to iSupply's guesstimates of raw component costs, to paraphrase Aaron Sorkin's hyperbole, while the second iPhone 3GS may have cost $179, the first one cost a billion dollars.

So take that $179 number you'll see all over the net with a grain of salt before you start knocking on the door at 1 Infinite Loop demanding your iPhone 3GS at "cost".

[Thanks to the Reptile for the tip, image via rapidrepair.com]

Rene Ritchie

Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.