Apple is making a decent profit on the iPhone 4 after the fees AT&T likely pays for each sale of the iPhone 4 ar added on, the most recent teardown by research firm iSuppli indicates. Each device costs about $187.51 to produce, with the new "retina display" being the most expensive component. iSuppli believes it to be manufactured by LG at a cost about $28.50 per unit.
Researcher Kevin Keller told BusinessWeek that Apple has seemed to generally spend about $170 to $180 to produce iPhones, from the original model in 2007 to today's iPhone 4.
The iPhone 3Gs initially cost about $179 to produce, although that price has since dropped to about $134. That means Apple likely now only breaks even or makes a very small profit as it sells for $99 from AT&T.
Inside, iSuppli found that the device uses a similar A4 chip that is also seen in the iPad, and confirmed the antenna is in the metal strip around the phone. As you've seen here on Technologizer, that's been a potential problem for Apple, although iSuppli makes no reference of it in its report.
This story, "iPhone 4 Cost Apple $188, Says iSuppli" was originally published by Technologizer.