Market research firm iSuppli has come out with its report on the iPhone 3G S. The company iSuppli
specializes in stripping new gadgets and reporting their assembly costs. The firm has reported that the Bill of Materials for iPhone 3G S was $172.46. After adding another $6.50 for manufacturing expenses the iPhone 3G S cost a total of $178.96 to Apple.

You are surely wondering as to how the handset has been sold at $199. This is where the wireless partner comes in. It is a common practice to offer an upfront discount and cover up the same in operating costs subsequently. Thus the discounts now offered will be made up on higher margins by the wireless partner, AT & T in this case.

Apparently there is a lot of similarity between the 3G and the 3G S. Andrew Rassweiler, Director of iSuppli said “By leveraging this commonality to optimize materials costs, and taking advantage of price erosion in the electronic component marketplace, Apple can provide a higher-performing product with more memory and features at only a slightly higher materials and manufacturing cost.”

The iPhone 3G S has a new $5.95 single-chip Bluetooth/FM/WLAN device from Broadcom. This chip performs two tasks and obviates the requirement of having two separate chips. Thus the iPhone 3G S could be setting up a trend of using chips for performing multiple functions.