In this press release, iSuppli has estimated the total cost of the hardware and assembly of the new 3G iPhone to be $173. This estimate is based on a virtual teardown of the device and an estimate of each individual component is taken into consideration. The new iPhone, despite having many technical advances compared to the original version, is estimated to be much cheaper than its predecessor. The director and principal analyst for iSuppli, Dr. Jagdish Rebello, said “The original 8Gbyte iPhone carried a cost of $226 after component price reductions, giving the new product a 23 percent hardware cost reduction due to component price declines.”

Each component has been itemized and given an estimated price. For instance the main application processor is estimated to be $13.50, while the GPS module is $3.60. They also estimate that other manufacturing costs equal about $9 per unit. The new 3G iPhone will sell for $199 for the 8 GB version, while the 16 GB version will be $299. However you must sign a new 2 year contract with AT&T to be able to purchase either version of the new 3G iPhone.