iPhone Unplugged

Read the fine in-depth specific details on how AT&T makes a profit with Apple's iPhone.

The typical iPhone components and their prices are as follows:

• 16 GB flash memory from Toshiba - $24
• Display module from Balda AG - $19.25
• Touch screen assembly from Sharp - $16
• Application processor from Samsung - $14.46
• Baseband from Infineon - $13
• Camera from Altus-Tech - $9.55
• SDRAM from Samsung - $8.50
• Bluetooth from Samsung - $5.95
• Memory MCP from Numonyx - $3.65
  
• RF Tranceiver from Infineon - $2.80
• GPS Receiver from Infineon - $2.25
  
• Triband Antenna from Murata - $1.35
• Power IC Function from Infineon - $1.25
  
• Audio Codec from Cirrus Logic - $1.15
• Manufacturing Costs - $6.50
• Other Parts - $48

The total built-up cost comes to about $179. While the advertised price is $199 with AT&T's 2-yr contract. AT&T pays Apple subsidies over the sale of each phone.

So basically the $199 phone costs AT&T an estimated $550. To cover the subsidy, it increased the data plan rate to 30 bucks a month from the earlier 20.

Over years, the real winner from the sale of iPhones will be AT&T. It enjoys the exclusivity with iPhone, with a guaranteed continuous stream of revenue.