Please Ignore iPhone 3G Component Cost Reports

I’ve been seeing an increase in the number of “reports” [1] [2] about the new iPhone component cost. People seem to think this is some sort of useful information. It isn’t. Having only component costs is pointless. But what’s worse is that these reports are just an imaginary breakdown with a guess at the components and their prices. This makes it completely silly. Even if you had all that information it would still be pointless until products begin to magically do the following all by themselves:

  • research and develop
  • license technologies used in it
  • assemble
  • package
  • ship
  • store
  • promote
  • sell

component cost is just a fraction of a significantly bigger number. It might be useful if you have a good idea about the costs for the above, but considering no one has actually broken down an iPhone yet these reports are a bit hasty and most likely misinformation.