iPhone 3G price and the environment iPhone 3G BY: ASEHINDE OLUWATOBI PETER (432497) Environmental friendly Excellent price tag

Introduction This presentation is mainly a study of how the price of iPhone 3G is affected by the Environment. We will be looking at the following case studies:  Regulatory bodies and policies  Market difference  Ultra-compact product and packaging designs Objective To break down into parts, study closely, examine and make analysis of how the price of the iPhone 3G is effected by the environment

iPhone 3G  iPhone 3G is designed and manufactured by Apple inc. iPhone 3G, the 2 nd Generation iPhone was launched by Apple CEO, Steve Jobs with a retail price of $199.  iPhone 3G is a smartphone with a fast 3G wireless network, Maps with GPS, support for enterprise features like Microsoft Exchange and the new App Store.  iPhone 3G combines;  a revolution phone,  a widescreen iPod and  breakthrough internet device with rich HTML and full web browsing (Apple inc, 2008)

Regulatory bodies and policies  Restriction of the use of certain Hazardous substance (RoHS directives ) restricts the amount of hazardous chemical and heavy metal used in the production of electrical and electronic equipment. Apple complied with RoHS directives in the manufacturing of iPhone 3G. As a result the components and materials used in the production process went through a lot of research and testing. This research and testing cost Apple some money and the cost is passed to the consumers in form of higher price of iPhone 3G. (Cate, 2007)  The Waste Electrical and Electronic Equipment (WEEE) legislation requires manufacturers to arrange and pay for recycling/reuse of their products; no cost to the consumer. WEEE legislation applies to Apple to arrange and pay for recycling/reuse of iPhone 3G without imposing any cost on consumers hence, no cost is passed to consumers as an addition to the price of iPhone 3G. (Cate, 2007) Eliminate Reduce Re-use recycle Dispose RoHS WEEE

 Unlike the original iPhone, iPhone 3G used light emitting diode (LED) technology for its display which is 30 percent less power than conventional LCD displays and cost effective in order to eliminate the amount of lead and to comply with the Restriction of the use of certain Hazardous substance directives (Apple inc, 2008). This reduced the production cost of its display by $10.50 compared to the original iPhone hence, reduced the price of iPhone 3G by $10.50

In order for Apple to ensure they comply with the RoHS directives, Apple developed their supplier code of conduct and a compliance monitoring program to ensure these standards are being achieved (Apple inc, 2008). Apple conducted a compliance monitoring program for the iPhone 3G component supplier (Jason, 2008). This compliance monitoring program incurred cost on Apple (cost of auditing). The incurred cost forms part of the manufacturing cost that adds $9 to the total BOM cost of direct materials only ($164.00) to give a total BOM and manufacturing cost of $ hence, the retail price is $199 Jason, 2008

Ultra-compact product and packaging designs iPhone 3G manufacturing cost was managed as a result of the ultra-compact product and packaging designs which lead to material efficiency reducing material waste generated at end of life. Because the manufacturing cost was managed to a cost of $174.00, the retail price is $199. (Apple inc, 2008) iPhone 3G material footprint was reduced which helped to maximize shipping efficiency. It also helped reduce energy consumed during production and material waste generated at end of life This reduces manufacturing cost for Apple therefore reducing the cost that would have been added to the price of iPhone 3G. (Apple inc, 2008)

Market difference (countries) iPhone 3G packaging volume is optimized for the specific market (country) in which it is sold. For markets (countries) that use a smaller power adapter such as Canada, United States, and Japan, the packaging volume is 30% less than packaging volume of iPhone 3G sold in the UK, which requires a larger power adapter (Apple 2008). This means less transportation will be used to ship iPhone 3G to markets (countries) with smaller power adapter thereby reduces the amount of greenhouse gas emission to the environment from the transportation used for the shipment. It also reduces the calculated cost of shipment that would have been added to the retail price of iPhone 3G. This explains why the price of iPhone 3G is different in different markets (countries). Also, more materials will be used in markets (countries) with bigger power adapter increasing the possibility of harmful chemical and also increasing the production cost hence, increasing the price of iPhone 3G in those markets.

Conclusion  Regulatory bodies and policies designed to protect consumers and the environment affect the components that are used to produce iPhone 3G. The cost of this component affects the production cost hence the price of iPhone 3G is affected. As with all electronic products, the iPhone 3G bill of material (BOM) costs will decrease over time as component prices decline. The BOM/manufacturing cost of the second-generation iPhone will decrease to $148 in 2009, down 37 percent from $173 in 2008, according to data from iSuppli’s Mobile Handset Cost Model (MHCM). If the iPhone 3G design is unchanged, the cost will decline to $126 in  The less material footprint, the less harmful it is to the environment, the lower the production or manufacturing cost hence, the lower the price of iPhone 3G

Reference Apple inc. (2008). iPhone 3G environmental report. Retrieved October 16, 2008 from Report.pdf Report.pdf Apple inc. (2008). Supplier responsibility at Apply. Retrieved November 12,2008 form Apple inc. (2008). iPhone 3G – phone, iPod, internet, and more. Retrieved on October 12, 2008 form Cate, B. ( 2007). Electronics Legislation: International. Retrieved October 16,2008 from Lin.H.K (2008). iPhone 3G Disassembly Comparison with previous iPhone. Retrieved November 29, 2008 from content/uploads/2008/08/iphone_3g_disassembly.pdfhttp://ofek.biz/wp/wp- content/uploads/2008/08/iphone_3g_disassembly.pdf Jason D. O'Grady (2008). iSuppli: iPhone 3G cost $173 to make. Retrieved on November 12, 2008 form iPod news. iPod info (2008). New iPhone carries $173 BOM and Manufacturing cost, according to a preliminary estimate form iSuppi. Retrieved on November 25, 2008 form and.htmlhttp://ipodnewsblog.blogspot.com/2008/06/new-iphone-carries-173-bom- and.html

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