Analysts from Portelligent estimate the production costs of a 4GB iPhone are about $200 and $220 for the 8GB version. These numbers don't include the costs of final assembly, but Business Week reports it does give some insight into the gross margin on Apple's phones.
The most expensive component on the phone, Carey says, is the touch screen, for which Apple tapped a little-known German concern called Balda (see BusinessWeek.com, 4/5/07, "Balda: The iPhone's German Accent"). The estimated cost of $60 per unit is mostly an educated guess. "This screen is like nothing I've ever seen before," says Carey.
Even the fact that Balda made it, is in fact, an educated guess. Carey told BusinessWeek that his analysis found no apparent markings that identified the screen's origin. But Balda's role in the screen has been something of an open secret in the wireless industry since the iPhone was first announced by Apple CEO Steve Jobs in January. Even so, Apple apparently took steps to make the source of the screen hard to identity.