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You know that $600 iPhone? The one that you can’t afford. The one that Steve Jobs said that they would lower the prices of, if their costs weren’t so high. Well, it turns out Apple’s costs may not actually be as high as Apple implies.

iSuppli, located in El Segundo California, recently dissected the 8GB iPhone, and determined that the cost of the hardware of the iPhone was only $265.83 leaving Apple with a 55% profit margin. Naturally, some of that 55% will go towards other costs such as R&D, and the purchase of very important domain names, however, Apple is still making a significant amount of profit on the machine itself.

While most companies only many single-digit profit margins, Apple seems to be taking a different route. Instead of lowering the price of the cell phone to attract more customers, Apple is charging more upfront for the cell phone, but promising to deliver software updates that will add new features.

In the end, we will see which business model works.

Read [Appleinsider]