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.”