Palm Pre Final Cost Study

The Palm Pre may cost significantly more to make than first anticipated and has surprising similarity to the iPhone's supply chain as it's existed in the past, according to a post-launch cost breakdown by iSuppli. Originally thought to cost $138 in raw manufacturing and parts, the smartphone is now estimated to cost at least $140 and as much as $160. Much of the price is attached to the 3.1-inch Sony multi-touch LCD, which with its Cypress controller costs about $40.60.

Other traits adding to the price are performance features that help it compete against the iPhone. The Texas Instruments OMAP processor is the next-most expensive part and may cost as much as $15; it helps the phone support its multitasking as well as the responsiveness of the web browser and other components. Palm also includes 256MB of RAM, matching the iPhone 3G S. Its 8GB of storage is also handled by a Samsung moviNAND part, which builds the storage controller into the flash memory rather than requiring a separate controller chip, as on the iPhone. The different designs add about $4 compared to an iPhone 3G with the same storage.

Additional parts like Qualcomm's cellular and Wi-Fi chips add up to $18.45. Smaller components from Foxlink, Kionix, Marvell and Maxim handle simpler duties.

While these costs don't include the marketing, shipping and other costs needed to sell the phone, Palm's choices explain the decision for Sprint to charge $199 for the Pre on contract even though it has half the storage of the iPhone 3G S at the same price. However, Apple's hardware has also received processor, RAM and graphics upgrades that should reduce some of the Pre's speed advantage.

No price analysis is available for the yet-to-ship upgraded iPhone, though the iPhone 3G cost $174.33 a year earlier. [via BW]

By Electronista Staff