Industry watcher iSuppli said in a report that it only costs three percent more for Apple to produce the iPhone 3GS than last year's model, set at roughly around $179.
Though Apple sells the phone at a subsidized rate of only $199, iSuppli says that AT&T and other service providers would probably buy the phone at a much higher price, probably around $600 per phone.
Link: TG Daily (c) - Apple 'makes $420 on each iPhone sold'