This chart on the cost of producing an iPhone in the US got me thinking.
This chart indicates that producing an iPhone in the US would cut Apple's profit margins on an iPhone by 20% or more. That's not really what got my attention, though. As an engineer, I started thinking about how a phone could be made cheaper, more effective by selecting a trade off in the parts you actually select to use and integrated into the device.
What if, for example, you decided your phone had no accelerometer, gyroscope? Switching orientation would happen with a softbutton in software. What if the camera disappeared? What if the battery you used was A LOT better, 3-4x the cost and quality and capacity? What if the screen and memory were the best money could buy? According to this chart the UI costs a fraction of the display and memory - that seems to be one part of the chart that has me flummoxed somewhat. The more iPhones Apple sells the less the cost of the UI per phone becomes, so I guess this price continues to dwindle as the power of the engineering continues to be spread over more and more devices.
I can see a lower cost device being made by another manufacturer as long as they got the important parts of the device well - that is fast internet, social media and email/calendar integration and a terrific phone experience. On a great screen with awesome battery life, such a phone could put a dent into Apple's domination. Making it in the US would be a great story as well. Is any manufacturer up to such a challenge?
UPDATE: Cover the bottom 4 parts of this pyramid and you're good to go: