updated 11:35 am EST, Thu January 29, 2009
iSuppli on Storm Costs
Despite arriving months later, Research in Motion's BlackBerry Storm is ultimately more expensive to make than its competitor from Apple, iSuppli says in a breakdown of the component costs of the two phones given to Business Week. The research group estimates that the Storm's pure manufacturing costs come to slightly less than $203, or more than the $200 asking price for the phone online. By contrast, the iPhone 3G cost $174 as of July, less than its official $200 price.
Some of the price discrepancy comes from Verizon's intention for the Storm to carry both CDMA and GSM functionality with 3G for both, which requires a $35 Qualcomm baseband processor. The iPhone currently works only on GSM and according 3G networks and so can use a less expensive component. A sharper 3.2-megapixel camera with autofocusing also adds about $13 to the price where Apple's 2-megapixel, fixed-focus camera costs less. The Storm's clickable screen contributes $15.
These cost increases are partly matched by technology from the iPhone, which has a more advanced multi-touch display and Wi-Fi that many believe Verizon forced out of the BlackBerry Storm to encourage using the carrier's 3G network. Apple's component pricing has also likely decreased as the parts become more readily available.
iSuppli's analysis doesn't include the cost of developing either phone or of marketing and selling the devices, either of which should push the price significantly higher. The higher Storm pricing suggests Verizon is subsidizing its handset through contract pricing more heavily than AT&T does the iPhone.
However, the use of CDMA potentially helps offset RIM's costs by letting it sell the phone through carriers like Bell, Telus and Verizon in addition to those in Europe. Apple is limited to offering the iPhone through AT&T and Rogers if it wants full 3G support in North America, though its 3G is supported in more foreign countries.