T-Mobile's G1 Google Android phone might cost less to produce than the iPhone, if a "virtual teardown" by iSuppli is accurate. Using its Mobile Handset Cost Model, which "provides detailed analysis of present and future expenses to build mobile phones with any possible feature set," iSuppli worked out that the T-Mobile G1 has a bill-of-materials cost of around $143.89.
The G1's priciest component is reportedly the "baseband," which costs $28.49 and couples an ARM11 multimedia processor with an ARM7 chip for modem functions. Next in line are the 3.2" 320x480 display ($19.67), the three-megapixel camera ($12.13), and the radio frequency/power amplifier component ($9.84). These figures only cover the hardware, though, so costs are probably higher once you throw in R&D, manufacturing, marketing, and so on.
iSuppli carried out a physical teardown of Apple's new iPhone 3G a few months back, and according to AppleInsider, the research firm found that the base model cost $174.33 to produce. The iPhone does have more built-in memory and a fancier touch screen, although the G1 packs a full QWERTY keyboard. Right now, T-Mobile charges $179.99 for a G1 with a two-year contract, while AT&T offers a similar arrangement with the 8GB iPhone 3G for $199.