In their recently released iPhone 3G teardown analysis, iSuppli estimates that Apple was able to cut over $50 in manufacturing costs over the first-generation iPhone model. This cost reduction, as well as increased subsidies, led the market research firm to speculate that Apple’s 3G iPhone profits are around %55.

Andrew Rassweiler, teardown manager and principal analyst at iSuppli, notes- “The addition of 3G wireless capability represents an evolutionary design step for the iPhone, not a revolutionary one. iSuppli believes Apple aimed for a more cost-effective design for the 3G iPhone compared to the 2G, in order to lower the retail price--which will allow the company to seed adoption and to capture maximum market share now, while the company still has buzz and a perceived differentiation relative to its competitors.”