[andreyf]

He's talking about cost of actually building the device. A big part of the iPhone's consumer price ($700 for 32gig) is markup, as he points out in comparing it to the price of the iPod touch, which is $300 for a comprable model.

In other words, he's claiming that Apple could undercut the A8181 Desire or the Galaxy S on price, but keeping the customer choose between "FREE* shiny new phone" or "$200* shiny new phone" reinforces the perception of Apple as a premium brand.

* with 2 year contract

[nowarninglabel]

If that is what the author is talking about, then the author is still off (at least based on this analysis):

Galaxy S $205 build cost - http://bit.ly/bocdoe

Apple Ipad $264.27 - http://bit.ly/aW8mvu

(bit.ly links cause the links are huge, goes to Isuppli)

[andreyf]

Uh, the iPad costs a lot more to build than $264.27: do the math on their earnings reports: Apple is hardly making any profit off of them. And the iPad has a screen 4x the size of the Galaxy S. You just can't compare the two...

[nowarninglabel]

Again, the author was the one that used the Galaxy S as a comparison, it's in the article. As for the figure, I gave the caveat that you have to believe the source, though I think the source is pretty well researched.

[jon_hendry]

" as he points out in comparing it to the price of the iPod touch, which is $300 for a comprable model."

But the iPod touch has some corners cut. No anti-oil coating on the screen, for one. It also retains the former body shape, not the flat-glass-on-both-sides iPhone 4 style.

[saint-loup]

One other downside for the Touch: no IPS display.

[andreyf]

http://www.apple.com/ipodtouch/features/retina-display.html

[jon_hendry]

It's not clear if that's an IPS LCD identical to the iPhone 4's, or if it's a non-IPS LCD with the same resolution.