With all of the hype surrounding the recent release of the Google G1, several reports are now suggesting that it is costing HTC 17% less in parts than it does Apple for the iPhone.

When comparing the bill of materials between the G1 and the iPhone, where each company spends the bulk of their money is in different areas. It costs Apple the most for the screen and flash memory used in the iPhone, while HTC is spending more for the baseband unit.

Other areas of difference are in the cost of the processor used in each device. The G1 uses a combination of the ARM11 processor for the multimedia engine and an ARM7 for the modem functionality, and this combination is more expensive than Apple’s solution.

In many areas the phone is very close to the same, but in other areas they are still different. However, the popularity of the iPhone has put Apple on the map as a major player in the market space. Still, the G1 is very new and HTC is lucky to have a cost advantage with the G1 over the iPhone; which could help the company better compete by being able to drop prices much more quickly down the road.