The soon to be launched Apple iPhone 3G will be 23% lower in manufacturing costs and more profitable than any product in its popular iPod line. Estimates by iSuppli, a research firm, are that the margins for the latest iPhone are expected to go way over the 50 % level that was achieved by Apple’s most popular media player items.   

Lower component costs and the estimated $300 subsidy per iPhone that wireless phone carriers are expected to pay Apple for the some of the reasons cited for the extra profits. Experts at iSuppli Corp. feel that Apple’s new 3G iPhone will come with a bill of materials and manufacturing cost of $173. Compared to the $226 that the company spent on the first 8 GB iPhone at its launch a year ago, that’s almost one fourth the cost.

iSuppli said, "Apple's iPod and iPhone products typically are priced about 50 percent more than their (materials and manufacturing) costs. With the new iPhone sold at a price of $199 (101 pounds) and the estimated subsidy of $300, Apple will achieve an even higher ... margin.”

Jagdish Rebello, an analyst at iSuppli said, "The new iPhone is significantly less expensive to produce than the first-generation product, despite major improvements in functionality and unique usability, due to the addition of 3G communications.”

The cost breakdown by iSuppli is speculative and based on information that may turn out to be incorrect. There are still two weeks to go before Apple and its carrier partners begin selling the iPhone 3G.