The cost to make an iPod, Xbox, and other electronics has big
bottom-line implications at Apple, Microsoft, and their peers. Some
companies are willing to swallow losses on some gadgets -- for instance,
gaming consoles -- in hopes that they'll make up the difference, and
then some, on sales of related gear, such as video game software. Other
companies, including Apple, are able to sell many products for a healthy
profit from the get-go.
Market research company iSuppli takes it upon itself to tear down
popular gadgets to find out the price of the component parts and the
vendors supplying those ingredients. A rundown of several recent iSuppli
teardowns follows -- each slide lists the product, maker, release date,
retail price on the release date, and iSuppli's estimate of the cost of
materials.
Apple iPad Date:
March 2010; April 2010 for 3G models Retail price: Starting
at $499 Cost of components: $219.35 to $334.95 In the
coming months, Apple plans to introduce six models of the iPad -- three
with 3G, three without. Researchers at market research firm iSuppli say
the mid-range 32-gigabyte 3G model will likely be the most profitable
of the six, given its retail price of $729 and estimated material cost
of $275.95. Components for the entry-level iPad that sells for $499 will
cost $219.35. The high-end 64-gigabyte model, which sells for $829,
will cost almost $335 to build.
Google Nexus
One Date: Jan. 5, 2010 Retail price:
Starting at $179 Cost of components: $174 Manufactured by HTC, Google's phone boasts the Android operating system.
T-Mobile USA sells the Nexus One for $179 with a two-year contract;
Google sells a version without a service contract for $529. Verizon
Wireless is expected to begin carrying the Nexus One sometime in 2010.
Motorola
Droid Date: Nov. 6, 2009 Retail price:
Starting at $199 Cost of components: $185
Motorola and Verizon Wireless went to great lengths to promote the
Droid, Verizon's first phone running the Android operating system, as
the anti-iPhone in TV ads. Verizon Wireless carries the phone for $199
with a two-year contract; it can be purchased contract-free from Best
Buy for $599.
Apple iPhone 3GS Date:
June 19, 2009 Retail price: Starting at $199 Cost of
components: $179.16
| Apple.com |
Usually the cost of components goes down from one generation of a
product to the next. The iPhone 3G, released in July 2008, cost $53 less
to build than the original iPhone, released in 2007. But costs rose by
about $5 for the iPhone 3GS. One reason is that the price of memory
hasn't declined as quickly as in the past. The newest iPhone comes in
two flavors, 16 gigabytes and 32 gigabytes, while the high-end version
released in 2008 had 16GB of memory. An improved 3-megapixel camera with
auto-focus costs more than the camera used in the previous generation.
Finally, a new Samsung applications chip, at $14.46 a pop, costs a
dollar more than last year.
Palm Pre Date:
Expected no later than June 6, 2009 Retail price: Expected
to be about $200 Projected cost of components: $137.83
Palm.com |
Palm (PALM) needs a winner in the Pre, and it's up against some
formidable competition in a smart phone field that includes Apple and
its iPhone and Research In Motion, maker of the BlackBerry. Boasting a
completely new operating system called WebOS, the Pre bears little
resemblance to the Treo line of smart phones that Palm has sold for
years. Like the iPhone, the Pre sports a so-called multi-touch display
that lets the screen react to more than one finger touch at a time. In
an analysis of the probably cost of Pre components, iSuppli estimates
the display alone runs $39.51, or almost one-fourth the total hardware
expense. Add in $15.96 for eight gigabytes of flash memory, $15.41 for
wireless components, and $12.39 for the 3-megapixel camera, and you've
accounted for more than half of the Pre's estimated hardware cost.
Amazon
Kindle 2 Date: Feb. 9, 2009 Retail price:
$359 Cost of components: $185.49 Amazon.com |
Amazon's second device to bear the Kindle name is thinner than its
predecessor, and in some ways more sophisticated. The main cost-driver
is the $60 display designed by E Ink Corp., while a wireless module from
Novatel Wireless adds another $39.50 to the cost of materials. An
applications chip from Freescale Semiconductor adds another $8.64 while
two kinds of memory chips from Samsung add another $6.10. Add in $4.45
for the enclosure, $7.50 for the battery and you've accounted for most
of the materials and manufacturing cost of the device, according to
iSuppli estimates.
Apple iPod Shuffle Date:
Mar. 11, 2009 Retail price: $49 (4GB) Cost of
components: $21.77 Apple.com |
The latest iPod shuffle is so small -- less than 2 inches long --
there's hardly room for parts or controls. The most costly components
inside are $6 worth of flash memory for storing music. In the unit
examined by iSuppli, the memory was supplied by Samsung. The tiny Apple
device also includes a Samsung-made chip that handles music and control
functions and costs $5.98. Add in the cost of the battery ($1.55)
and the headphones with the inline volume controls ($1.20), and you've
accounted for about two-thirds of a device that costs less than $22 to
make, including packaging.
Research In Motion
BlackBerry Storm Date: Nov. 21. 2008 Retail
price: $249 before rebate Cost of components: $202.89
BlackBerry.com |
Research In Motion's latest effort to outpace Apple in the hotly
contested smart phone market, the BlackBerry Storm sports a unique touch
screen design that evokes the iPhone in many ways. Reports say RIM sold
more than a half a million Storms in its first month on the market. All
told, the materials used to make it cost $202.89, according to an
iSuppli teardown analysis. Surprisingly, its most expensive component is
not the screen, but its Qualcomm-made wireless chip, which costs nearly
$35.
Research In Motion BlackBerry Bold Date:
Oct. 2008, in the U.S. (expected release date) Retail price:
Expected to be about $300 Cost of components: $169.41
RIM.com |
Research In Motion kicks its smart phone battle with Apple into
overdrive with the release of three new devices this year, including the
BlackBerry Bold. This device cost just under $170 to build and may sell
for as much as $300 when it’s offered through AT&T some time this
year.
Apple iPhone 3G Date:
July 11, 2008 Retail price: Starting at $199 Cost of
components: $174.33 Apple.com |
The total cost of materials used inside the latest iPhone is $174.33, a
dollar and change higher than the preliminary estimate iSuppli made in
June, about two weeks before the phone was actually released. If the
analysis is correct, Apple is spending about $53 less on materials than
it did with the first iPhone, which iSuppli says costs $227 to make.
After accounting for a subsidy from AT&T, iSuppli reckons Apple
makes a per-unit gross profit of 55%.
provided by
|