The U.S. Army has purchased an Iron Dome anti-rocket battery from Israel, mainly for evaluation purposes. The Americans want to see if Iron Dome would be worth getting for deployment in Iraq and Afghanistan, where American troops are still stationed and probably will be for some time to come. The American purchase was the first export sale of Iron Dome. Israeli efforts to export their Iron Dome anti-rocket system have otherwise failed so far, despite years of Iron Dome success in knocking down rockets under realistic combat conditions. The Israeli manufacturer of Iron Dome thought this would make Iron Dome a hot export item. After all, Israel is one of the top ten weapons exporters in the world. This is because Israeli stuff works well and is usually combat tested. But all that has not helped Iron Dome.
Although the new Israeli Iron Dome system had succeeded, by 2012, in shooting down about 85 percent of the several hundred rockets (of 1,400 launched) headed for Israeli populated areas, this was a unique situation. Even continued success to the present has not made Iron Dome exportable because few other countries have a situation similar to the rocket threat against Israel.
The main problem is that Iron Dome was designed to deal with an enemy that is a terrorist organization (Hamas) operating out of an area (Gaza) that is basically home for Palestinian refugees who have been there for over 60 years and want nothing less than the destruction of Israel. A similar organization (Hezbollah) controls southern Lebanon and is also dedicated to the destruction of Israel, using 40,000 unguided rockets they received from Iran. This is the unique situation that Iron Dome was designed to deal with.
There are some nations (South Korea in particular) that are threatened by unguided rockets fired from a neighbor. Actually, South Korea showed some interest in Iron Dome but there are few countries in a similar situation and South Korea has not expressed eagerness to place an order.
There’s nothing special about most of the Iron Dome components. The Tamir missiles each weigh 90 kg (200 pound), are three meters (9.8 feet) long, and 160mm in diameter. They have the usual components of a guided missile (rocket motor, electronics, and mechanical devices to actuate the fins and batteries). Such interceptor missiles are increasingly common, but usually against much faster ballistic missiles. Without the predictive software Iron Dome would quickly run out of missiles and be much more expensive to operate as well.
The key to Iron Dome’s success is its software. Iron Dome uses two radars to quickly calculate the trajectory of the incoming rocket and does nothing if the rocket trajectory indicates it is going to land in an uninhabited area. But if the computers predict a rocket coming down in an inhabited area, a Tamir guided missile is fired to intercept the rocket. This makes the system cost-effective. That's because most of these unguided rockets land in uninhabited areas but the few of those that do land in populated areas inflict casualties.
As of 2014 Israel has bought ten Iron Dome batteries and may obtain another five. Each of the Iron Dome batteries has radar and control equipment and three or four missile launchers (each containing twenty missiles). Each battery costs about $50 million, which includes up to a hundred Tamir missiles. These cost $90,000 each but would cost under $50,000 each if produced in larger quantities.
The U.S. contributed nearly $300 million for development of Iron Dome. Even with the American financial help Iron Dome is costing the manufacturer money because without export sales making a profit is difficult. Raising the price of the Iron Dome components is politically difficult and if the manufacturer has to eat the losses it weakens the financial health of several Israeli firms.