Steve Ballmer might go on about the iPhone being heavily subsidized, but today's Mobile Magazine reveals that the iPhone might be cheaper to build than you think. According to their estimates, the 4GB iPhone costs $245.83 to manufacture, about half of the five hundred dollar asking price. Add another $35 to step up to 8GB onboard. "Of course," they add, "These figures don't include R&D, advertising, and Steve Jobs' expense account." If right, this dramatically undercuts the notion that Cingular is massively subsidizing the iPhone in order to bring the price into line with consumer expectations. It also brings the possibility of a phone-less (albeit pretty expensive) G6 iPod into greater likelihood.
I'm not big on equipment and manufacturing costing. For all I know, they are pulling these numbers out of thin air (John Gruber at Daring Fireball seems to think so, linking to Apple Insider), but it's certainly an interesting place to continue discussing the "subsidies" controversy.