Apple's iPhone 3GS cost about $178.09 to manufacture, according to analyst estimates.
A recent tear-down analysis of the new iPhone 3GS found that the hardware components in the 16GB version of the device carried an approximate cost of $172.46. The cost of manufacturing each iPhone was approximately $6.50 per unit.

In the USA, the 16MB iPhone 3GS retails at $199 with a two-year commitment with exclusive carrier AT&T. Customers who do not sign up for the contract must pay $399. In the UK, exclusive carrier O2 is offering the 16GB model for £184.98 with a contract and £440.40 without a contract.

The higher prices being charged for the phone without a contract could reveal how carriers expect to make a profit from the device.