Apple 3GS about $20 more expensive to build than Palm Pre
Apple and Verizon continue to play 'will they won't they' over a possible iPhone deal, as the cost of the iPhone 3GS emerges, at a probable $20 more expensive than the Palm Pre, according to teardowns by iSuppli. However, despite the Pre's high profile and apparent cost efficiency, it will obviously be too late to save Palm from poor results for its fourth quarter, which will be announced later today.
Apple and Verizon continue to play ‘will they won’t they’ over a possible iPhone deal, as the cost of the iPhone 3GS emerges, at a probable $20 more expensive than the Palm Pre, according to teardowns by iSuppli. However, despite the Pre’s high profile and apparent cost efficiency, it will obviously be too late to save Palm from poor results for its fourth quarter, which will be announced later today.
Analysts are predicting a loss of about 62 cents a share for the quarter, one in which the Pre failed to materialize and the vendor had to contend with rapidly declining sales of its legacy ranges. Palm is expected to report sales of around $80.6m, 72% down year-on-year. For the year, the consensus forecast is a loss of $2.37 per share on sales of $729.8m
With smartphone competition heating up, there is intense pressure on margins, as RIM’s recent quarterly results highlighted, with falls in average selling prices across its ranges. So the cost to build new handsets is increasingly vital to success, and according to estimates from teardown specialists iSuppli, the Pre comes in around $150, while the iPhone 3GS costs $172.46.
The biggest portion of that sum goes to Toshiba, says the analyst, for its 16Mb flash module, priced at $24. Toshiba and Elpida have robbed Samsung of the flash memory element of the new iPhone though Apple can swap suppliers in and out according to pricing. The second most expensive element is the 3.5-inch display module, priced at $19.25, and the third is the associated touchscreen display electronics at $16. Both these parts were also from Toshiba.
Samsung is still in the 3GS as supplier of the application processor ($14.46) while Infineon provides the baseband processor ($13) and camera module ($9.95). The other new component suppliers were Broadcom and Dialog Semiconductor with the former’s integrated Wi-Fi/Bluetooth module ($5.95) replacing separate Marvell WLan and CSR Bluetooth chips; and the latter ousting NXP.
Meanwhile, in a US TV interview, Verizon Communications’ CEO Ivan Seidenberg was evasive about possible iPhone launches. He told the Charlie Rose program that the issue was still undecided and it would be up to Apple whether it created a version for Verizon Wireless’ upcoming LTE network. He was also non-commital about stories that Verizon would be the initial launch carrier for Motorola’s first Android phone in the fourth quarter, telling The Wall Street Journal it “might be true” and pointing out that there were potential conflicts of interest between Google web services and those of the carriers themselves. “They also like to provide services that in effect sometimes compete with the things that we do,” he said.