Palm Pre less expensive to make than iPhone
updated 08:10 am EDT, Wed April 29, 2009
Palm Pre Cost Breakdown
The Palm Pre will cost substantially less to build than the iPhone 3G did when it was new, according to a pre-launch cost breakdown by iSuppli. While the company doesn't have full access to the parts Palm is using, its estimates put the pure cost of assembling the first webOS phone at $138. The multi-touch screen is expected to be the most expensive part at $39.51, while the phone's Texas Instruments OMAP processor -- touted as significantly faster than the iPhone's Samsung chip -- costs just $11.
Next most expensive after the screen would be the built-in 8GB of storage, which should cost $15.96. The cellular baseband processing that handles the CDMA calling and EVDO Rev A networking is poised to come from Qualcomm and should cost $15.41, while the 3-megapixel camera is likely to come from Aptina and cost $12.39.
Patent licenses and other royalties for certain parts of the phone technology and pre-loaded software are predicted to cost $22.61, but these aren't factored into the direct cost as these are more likely to change. The price also doesn't factor in development, marketing, shipping and other factors involved in getting the Pre to stores.
The expenses put the price of the phone at $36.33 than the iPhone 3G's $174.33 launch cost, which itself focused only on manufacturing. iSuppli believes that some cost differences may depend on the multi-touch display and software, which are likely to use at least slightly different approaches than Apple. It also comes roughly a year later and is likely to have reduced the prices of some parts, like the 8GB of flash memory present in both the base iPhone and the Pre.
Regardless of differences, the pricing is close enough that Sprint is expected to price Palm's device at the same $199 as its Apple equivalent but will ask for a much more modest subsidy: while the contract-free 8GB iPhone costs $599 through AT&T, Palm may only ask $300 from Sprint and therefore require only a $100 subsidy that can be recovered relatively quickly.
The news comes as an ad campaign and other leaks suggest Sprint may launch the Pre on June 7th, or just two days before Apple is expected to introduce a new iPhone that should offer improved storage and other new features at the same $199 price. [via BusinessWeek]
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Joined: Aug 2001
wow!
Next thing you know, they're going to tell us its cheaper now to produce an iphone then it was two years ago.
I never would have thought prices for hardware components went down over a large period of time...