[hkmaxpro]

Your question prompted me to look up “cost of goods sold”.

From https://www.investopedia.com/terms/c/cogs.asp

> Cost of goods sold (COGS) refers to the direct costs of producing the goods sold by a company. This amount includes the cost of the materials and labor directly used to create the good. It excludes indirect expenses, such as distribution costs and sales force costs.

So the $550 or $650 COGS includes the cost of labor for manufacturing, but excludes (say) marketing and auditing costs.

[balderdash]

And would exclude all of the R&D, certification and testing, procurement, and in some cases depreciation from factories/equipment

[gknapp]

Right, but this is the same company, so the cost of marketing, auditing, R&D, etc. shouldn't be different for these products. That's a fixed cost for the company.

This is a guess, but the argument is probably that it took way more R&D effort for them to figure out how to produce it efficiently in the US, and they've chosen to increase the cost of the US phone variant to offset this particular R&D expenditure that the Chinese variant didn't have.

[knubie]

From the interview:

> So it's about $650 to produce that entire phone. But what we're doing by selling it for greater originally, we're looking at a lot of differentiators for us. It wasn't just made in the USA. It's the fact that it's a secure supply chain, that you know, staff that's completely auditing every component, which means we're selling to a government security market with all those additional layers that we've added on top.

So I guess the answer is that they're selling to the "government security market" so they can charge whatever the hell they want.