The iPhone profit - in the billions.

Implications: Assume the iPhone only sells 10 million phones next year, that's one profit number. But what if they sell twice that amount and what happens to the iPod?

Analysis: iSuppli: iPhone 3G costing Apple $173 to build, but that is only part of the story. While the iPhone is selling in most cases for $199.00 it would appear on the suface Apple is not making much. But the actual sale price is more like $499 due to the subsidy from the operators. Also assume that iSupply did not include all costs such as some of the R&D, advertising and marketing. Round the total cost up to $225. If Apple sells on the low estimate of 10 million phones that is $2.25B.
 
On the high side some estimates have stated 26-27 million phones and with that type of production run the costs would drop. With the expanding marketplace to worldwide, it is very possible that Apple could achieve the much higher sales levels. That could raise possible profit to over$6B.

The only current negative to this is the loss of sales to the iPod line as more people use the iPhone as both a phone and pod.

I believe this fall Apple will introduce a totally new line of iPods to bring the sizzle back to the iPods.