iPhone production costs are estimated

A research firm called iSuppli has dissected an iPhone 3G and estimated it's production cost to be $174.33 per phone.

The cost to produce the iPhone 3G has been revealed to be $52 less than than the production cost of the previous iPhone, as such it has been estimated that Apple has about a 55% profit margin on iPhones sold through AT&T before accounting for marketing and software. While I've heard a few complaints from people about this kind of profit margin, I don't see any problem with it. Apple has created a device that is quite advanced in the US market, many people love the phone, and Apple have most definitely put a lot of work into designing it. I think they deserve that kind of profit.

Source for this is at maximumpc.com, original source at techtree.com