ISupply estimates manufacturing costs for Apple’s new high-speed iPhone totaled $173, compared with $265 for the original iPhone, released one year ago for about $500 with no subsidy. After what it called “component price reductions,” the initial iPhone carried a cost of $226.

“At … $173, the new iPhone is significantly less expensive to produce than the first-generation product, despite major improvements in the product’s functionality and unique usability, due to the addition of 3G communications,” said Dr. Jagdish Rebello, principal analyst for iSuppli.

The figures don’t include other costs, including software development, shipping and distribution, and packaging, iSuppli said.

With Apple now profiting even more per iPhone sold, it’s obvious why they chose to market their phone through only a select few exclusive service providers around the world. By sinking their teeth into a telecommunications giant like AT&T, Apple can make windfall profits, while still not alienating their buyers by making the outward price of the device much higher.

From Now Apple has contracts with carriers in over 70 countries, all of which are preparing to sell the new iPhone 3G. A large and active grey market in unlocked iPhones no longer serves Apple’s interests. Apple needed to make it go away, and quickly.

Apple’s bricking strategy apparently has yielded to a method much harder to defeat: the terms of the AT&T service contract.

Simply canceling the contract with AT&T after the iPhone purchase would seem a workable tactic. Adding the lower cost of the new iPhone ($199) to the $175 fee for canceling the contract and the initial $40 activation fee brings you to a total of $415, just $16 more than buying the original iPhone without a contract.

But according to a Computerworld article, AT&T will require the return of the iPhone before it cancels the contract.

So if you really want to own an unlocked iPhone, you’ll face no insurmountable technical barrier. But since you’ll be paying full freight for AT&T’s service, you’ll have gained little.