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iPhone less costly to make than BlackBerry Storm

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.



By Electronista Staff
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Comments

  1. bjojade

    Fresh-Faced Recruit

    Joined: Jun 2007

    -1

    Who cares?

    Raw manufacturing cost doesn't mean much, especially in cell phones.

  1. joecab

    Fresh-Faced Recruit

    Joined: Apr 2004

    -2

    ditto

    We have no idea how much either of them paid for their components in bulk. I wish they'd stop with these silly breakdowns already.

  1. dliup

    Fresh-Faced Recruit

    Joined: Jan 2006

    -2

    R&D cost

    Apple probably put in much more into R&d than this poor quality knockoff.

  1. ggirton

    Fresh-Faced Recruit

    Joined: Nov 1999

    +2

    No WiFi in the Storm

    uh-oh

  1. Salsa

    Forum Regular

    Joined: Oct 2003

    +2

    re: Who Cares?

    Investors care about this info.

    We do indeed have an idea how much manufacturers pay for these components in bulk. iSupply does have access to the prices the component manufacturers charge to the assembly companies. We know that Apple has had a special deal on flash ram that saves them a little, but it doesn't amount to a lot compared to the cost of a device like the iPhone.

  1. JulesLt

    Fresh-Faced Recruit

    Joined: Jul 2005

    -1

    R&D

    Dilup - Apple probably did spend more on R&D, although don't forget that the R&D on something like a multi-touch sensitive display is done by the supplier and so in the component costs.

    Let's presume that the basic R&D of assembling the phone from a bunch of components is going to be roughly the same. The real difference is in the software.

    However - Apple's R&D cost will have been lowered because they can share a lot of it with the iPod (Touch) and OS X in general (the multi-touch work feeding back into the latest MacBook touchpads), plus they had a strong foundation to start with. On the software front, RIM would have been starting somewhere behind - they had a good robust operating system, but one that was very focused in capability.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    +1

    Re: R&D

    So what you're saying is Apple isn't innovative. They just buy companies that are, then try to improve on it. Hmmm, sounds like a company up in Washington...

  1. rytc

    Senior User

    Joined: Jan 2001

    0

    huh?

    That's not what he said, he said that money spent on developing the touch screen itself wasn't money Apple spent it was spent by the company that makes the screen. You know just like RAM isn't developed by Apple or CPUs....I guess they really are not innovative seeing as they buy RAM from someone else.

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