Wonder What the iPhone Costs Apple?

There's been much hoopla over the Apple iPhone.

To some, that's a surprise. The device itself costs a whopping $599, excruciatingly expensive compared to the average cell phone, which is free with a two or three year plan. Of course, the iPhone boasts far greater features, including video, a massive touch screen, and wireless support (WiFi).

But, that price!

Some have compared the iPhone release with that of Sony's PlayStation 3 video game console. They both retail for the same price, they both offer more technical features than their competition, and they're both really, very cool.

However, there are differences. Big ones.

For one, the iPhone is already proving a success. Although limited numbers of the PlayStation 3 also led to long lines and angry consumers, competition from Microsoft and especially Nintendo took the steam out of Sony. So did the profit margin.

In fact, Sony has been forced to lay off many of its European and North American workers in order to overcome a console that is not only expensive for consumers, but also for themselves. The PlayStation 3 actually retails for less than its total worth. (Source: infopackets.com)

Not the iPhone.

In fact, recent reports suggest that Apple is collecting an impressive profit from its device. Research firm iSuppli is telling the media that the iPhone actually sells for double its production costs, a staggering mark-up that would make it one of the largest profit margins in cell phone history. (Source: washingtonpost.com)

According to iSuppli, the most expensive iPhone model, that which sells for $599, actually costs Apple just $265.83. Such estimates were made by the firm after it tore open an iPhone in order to appraise the parts within. (Source: bloomberg.com)

Forget Transformers

Who needs a major Hollywood blockbuster when one weekend in retail reaps some $186 million? That's the reported earnings for Apple over just a couple days, according to Goldman Sachs Group, Inc.

I'll give the poorly-faring PS3 one thing: at least it's fairly priced.