Google Nexus One components estimated at $174.15 cost

Posted:
in iPhone edited January 2014
Internal components of Google's new Nexus One smartphone are estimated to cost about the same as the iPhone 3GS when it launched last year, a new analysis has concluded.



After conducting a teardown of the Nexus One, iSuppli has estimated taht the cost of parts in the handset is $174.15. The dollar amount includes hardware and component costs, but does not take into consideration expenses like manufacturing, software, box contents, accessories and royalties.



"Items like the durable unibody construction, the blazingly fast Snapdragon baseband processor and the bright and sharp Active-Matrix Organic Light Emitting Diode (AM-OLED) display all have been seen in previous phones, but never before combined into a single design," said Kevin Keller, senior analyst of competitive analysis for iSuppli.



"This gives the Nexus One the most advanced features of any smart phone ever dissected by iSuppli?s Teardown Analysis Service?a remarkable feat given the product?s BOM is similar to comparable products introduced during the past year."



The estimate is about on par with the costs associated with the iPhone 3GS from a similar review last year. iSuppli estimated that the 16GB iPhone 3GS cost $178.96, slightly higher than the $174.33 in parts found in the 8GB iPhone 3G.



The Nexus One's Snapdragon processor, which allows 720p video playback, is estimated to cost $30.50, making it the most expensive component of the phone. The 3.7-inch AM-OLED display is estimated at $23.70. The phone also has 512MB of DDR DRAM and 512MB of NAND flash memory, along with a 4GB MicroSD card. The memory, supplied by Samsung, is said to cost $20.40.



Source: iSuppli Corp., Jan. 2010



Google's handset, built by HTC, can be purchased direct from the company unlocked and contract-free for $529. It can be bought subsidized by T-Mobile for new customers with a two-year contract for $179. A CDMA version of the handset will also be available for Verizon this spring.



Last week, a teardown of the Nexus One found the 0.45-inch-thick device was easy to disassemble. It has a removable battery, features 802.11n Wi-Fi, and was shown to be "colorful" on the inside.



Following its launch last week, Google faced some criticism from customers. Support is not available by phone, only via e-mail. In addition, some have complained that they can't find answers for support issues from Google, and that they have been passed back and forth between the search giant, HTC and T-Mobile for assistance.



For more on the Nexus One and how it stacks up against Apple's iPhone 3GS, see an in-depth comparison from AppleInsider.
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Comments

  • Reply 1 of 45
    When this site became GoogleInsider?
  • Reply 2 of 45
    mactrippermactripper Posts: 1,328member
    Hmm, iPhone $600 - $179 = $421



    Lets assume Apple is figuring on replacing each iPhone once under warranty plus shipping, so that's $200/$200 and the last $200 is profit.



    So if the iPhone works correctly under warranty, that's $400 profit.



    Plus the kickback from the carriers...



    Plus the kickback from the App Store and iTunes...





    Nice margins and multiple income streams there Apple...





    I'm not playing, because outside of a few apps used occasionally, the iPhone is mostly a gaming device as proven by the TOP APPS.



    The way I figured it, a iPhone with contract costs as much as a MacBook Pro MORE than a regular cell phone with a $30 a month contract.





    I guess it's assumed we should give up one for the other, and a lot of people are doing just that.
  • Reply 3 of 45
    davidtdavidt Posts: 112member
    Quote:
    Originally Posted by MacTripper View Post






    I'm not playing, because outside of a few apps used occasionally, the iPhone is mostly a gaming device as proven by the TOP APPS.



    The way I figured it, a iPhone with contract costs as much as a MacBook Pro MORE than a regular cell phone with a $30 a month contract.




    your argument leads me to believe you base your purchasing decisions on the cost of the device. naturally there is nothing wrong with that. however cost alone is not the determining factor for most people who buy apple products; apple products are luxury devices, i expect that most people who visit these forums are rich enough to pay extra for prestige or pleasure.



    on another note, the iphone is obviously implemented for various uses and tasks, i'm sure it's used for gaming by some people, for me however it is a mobile office while on tour and taking care of business; i have never played a single game on this device in the 2 years i've had it, nor do most of the people i know who use it. ie: app-store stats are not automatically an indication of what the iphone is being used for. i use it all day every day - for office work, and have only downloaded about 5 apps in 2 years, my needs are covered by mail, ical, safari, maps etc. no need for a any more.
  • Reply 4 of 45
    ktappektappe Posts: 763member
    This article is comparing current N1 parts costs with last year's 3Gs. Don't the costs of the parts decrease over time as manufacturing methods are made more efficient and additional suppliers come online? I'm very curious what the CURRENT cost to manufacture a 3Gs is. Anyone have any info on this?
  • Reply 5 of 45
    quadra 610quadra 610 Posts: 6,743member
    Quote:
    Originally Posted by MacTripper View Post




    I'm not playing, because outside of a few apps used occasionally, the iPhone is mostly a gaming device as proven by the TOP APPS.



    Top Apps prove that games happen to be popular, not that the iPhone is a "gaming device." The iPhone also has the highest-quality apps in each class across the board, from IM clients to utilities, etc.



    However, the iPhone is the premiere device for mobile (smartphone) gaming. This is because it has the best games. Great games for any device will always be popular, regardless of whatever else the device does. If a device has good games for it, games will always feature very high on the popularity lists. You can have several great VNC apps or amazing navigation apps, but games tend to have mass appeal.



    The iPhone is an everything device. It does a variety of things and it does most of them quite well. The popularity of games, however, does not mean it is a "gaming device" (whatever that means) as opposed to a (fill in the blank) device.
  • Reply 6 of 45
    Hardware prices plumet pretty fast. This means that Apple can assemble a decent slate for a decent price. And this in combination with a contact will of course make it available to the masses. I wonder how Apples' slate will shape the market. And how the iPhone will evolve to a stable and iPod-like dominance.
  • Reply 7 of 45
    Quote:
    Originally Posted by MacTripper View Post


    outside of a few apps used occasionally, the iPhone is mostly a gaming device as proven by the TOP APPS.



    Well, actually the top free app right now in the US store is a virtual roll of toilet paper that you unroll. I wouldn't exactly call that a "game"
  • Reply 8 of 45
    Quote:
    Originally Posted by MacTripper View Post


    Hmm, iPhone $600 - $179 = $421



    Lets assume Apple is figuring on replacing each iPhone once under warranty plus shipping, so that's $200/$200 and the last $200 is profit.



    So if the iPhone works correctly under warranty, that's $400 profit.



    Plus the kickback from the carriers...



    Plus the kickback from the App Store and iTunes...



    Actually your math is off. Apple only gets 200 from the customer initially. Then there's some kickbick from the carriers to bring it up to an estimated 600. So your profit margins are off by $200! If they replace an iPhone during warranty, it's probably break-even, maybe slight profit. Really, it doesn't benefit Apple to produce faulty iPhones And App Store isn't really making a huge profit margin, Apple executives said that they run it as a purely break-even operation, which explains even though it's multiple billion downloads in, it's barely made a couple million in profit. Which is nothing compared to the many many millions Apple rakes in with hardware profits on everything else. Are you trying to replace Teckstud, because I see a similarity here...
  • Reply 9 of 45
    boogabooga Posts: 1,077member
    Quote:
    Originally Posted by davidT View Post


    apple products are luxury devices, i expect that most people who visit these forums are rich enough to pay extra for prestige or pleasure.



    Only inasmuch as any smartphone or properly working laptop is a "luxury device". Most of the planet can't afford such a thing, and there are a lot of cheap knockoffs that you can cajole into some level of usefulness. But to call Apple products "luxury devices" imply an insensitivity to a cost/benefit analysis, which I don't think is valid.
  • Reply 10 of 45
    ivladivlad Posts: 740member
    Yeah it's cheap because there's no internal memory like in iPhone. Users have to spend extra $70 for 32GB micro card. And the screen is AMOLED but its cheaper than custom made touch screen of iPhone.
  • Reply 11 of 45
    ivladivlad Posts: 740member
    Quote:
    Originally Posted by striker_kk View Post


    When this site became GoogleInsider?



    When Google decided to become competitor to Apple.
  • Reply 12 of 45
    Quote:
    Originally Posted by striker_kk View Post


    When this site became GoogleInsider?



    Seriously...
  • Reply 13 of 45
    And obviously software on it is not on list of items. So everybody assumes it is free?



    Show me those robots that write software for free and do not need maintenace in form of food, place to live.





    I am one of those that write "software for free" for corporations like Google.



    If someone still thinks software engineering is easy then be my guest write software for yourself.





    Now Google developers have PhD in CS. They are not free workforce and I am not sure if you can easily develope such products with self-educated teenager geeks doing this for fun only. So far experiments like that (creating software product - not hacking someones product or solution) have failed.





    BTW human work is the most expensive one than automated silicon line so, software is more expensive than hardware (usually). Also designers of hardware do not work for free.







    Good luck with cost estimations. Those are not profits margins for Google that you suggest (difference between pricing and cost of hardware components).
  • Reply 14 of 45
    boogabooga Posts: 1,077member
    And yet, Google is giving this software away, aren't they? If I wanted to create my own Adroid phone it's the hardware that costs money. The software comes free from Google with only customization required and maybe a few outsourced drivers, doesn't it? If Google isn't going to value software higher than $0 why should anyone else? If you write customer-facing software for Google, you're their loss-leader, not their bread-and-butter.
  • Reply 15 of 45
    Quote:
    Originally Posted by MacTripper View Post


    Hmm, iPhone $600 - $179 = $421



    Lets assume Apple is figuring on replacing each iPhone once under warranty plus shipping, so that's $200/$200 and the last $200 is profit.



    So if the iPhone works correctly under warranty, that's $400 profit.



    Plus the kickback from the carriers...



    Plus the kickback from the App Store and iTunes...





    Nice margins and multiple income streams there Apple...



    And your math is off further than bartfat says...



    The cost of the hardware is not the only part of the cost of the device. It costs money for developers to design hardware and write & debug software, for people to assemble and test individual phones, for electricity to keep the lights on (and computers running) while they do that, for water and janitorial services for the bathrooms, etc, etc (this is mentioned in the second paragraph of the original post).



    All this is wrapped up in the cost of the device. If Google expects to sell 1 million of the Nexus One, each Nexus One includes 1 millionth of the cost to pay people to develop the Nexus One.



    Google's current profit margin is 27.57%, so you can estimate that 165.42 USD is profit. This is almost certainly low, since Google offers so many other products and services for free.
  • Reply 16 of 45
    al_bundyal_bundy Posts: 1,525member
    Quote:
    Originally Posted by Booga View Post


    And yet, Google is giving this software away, aren't they? If I wanted to create my own Adroid phone it's the hardware that costs money. The software comes free from Google with only customization required and maybe a few outsourced drivers, doesn't it? If Google isn't going to value software higher than $0 why should anyone else? If you write customer-facing software for Google, you're their loss-leader, not their bread-and-butter.



    android is free, but the application to access gmail and other services are licensed by google and google gives an advertising kickback to the licensee making it a better proposition than WinMo. Google is doing the same thing as MS did since the CEO was a victim of that strategy. and it's the same thing as MS going Bing Cashback deals and buying users
  • Reply 17 of 45
    Quote:
    Originally Posted by jglavin View Post


    Well, actually the top free app right now in the US store is a virtual roll of toilet paper that you unroll. I wouldn't exactly call that a "game"



    What would you call it? It's placed under the games catagory.
  • Reply 18 of 45
    wigginwiggin Posts: 2,265member
    Quote:
    Originally Posted by MacTripper View Post


    Hmm, iPhone $600 - $179 = $421



    Lets assume Apple is figuring on replacing each iPhone once under warranty plus shipping, so that's $200/$200 and the last $200 is profit.



    So if the iPhone works correctly under warranty, that's $400 profit.



    I'm just going to "+1" everyone else's reply to this faulty math. Design, assembly, shipping, inventory management, sales expenses, support costs, etc, etc, etc.
  • Reply 19 of 45
    I love seeing tear down costs like this. For all companies.

    I then like to compare it to the price of the device "off contract".

    And then I question "Why exactly do I let the telecom companies take all this money for the lousy services they provide?"



    Seriously, can any one give me a GOOD reason as to why the "off contract" prices are so very different from the build prices? I can understand margins of the devices, but this is something else altogether.





    Also, I'm all in favor of NOT locking handsets to a particular carrier. Choose your handset SEPARATE of your carrier, would make competition better, and the actual service better. Most commercials I see for VZW,ATT,Sprint,T-Mobile, are for the handsets, not their services! Something is VERY wrong with this picture.
  • Reply 20 of 45
    davidtdavidt Posts: 112member
    Quote:
    Originally Posted by Booga View Post


    Only inasmuch as any smartphone or properly working laptop is a "luxury device". Most of the planet can't afford such a thing, and there are a lot of cheap knockoffs that you can cajole into some level of usefulness. But to call Apple products "luxury devices" imply an insensitivity to a cost/benefit analysis, which I don't think is valid.



    true, but i wonder how many buyers of eg. laptops study cost/benefit analysis?



    i have not observed anybody who had to save up for a mac.



    if course i have no figures, but form observing those around me:

    apple products do NOT get bought because after extensive research the prospective consumers have discovered that a mac is not more expensive in the long run, has better specs than competing products etc.



    apple products DO get bought because 1- friends recommend it, 2 - lovely device, a status symbol etc. 3 - consumer was happy with previous apple device (and service etc).



    and to buy an expensive machine based on these merits qualifies it as a luxury item, which happens to come with nice side effects (integrated hard/software, nice user experience, good serivce etc)



    all the first iphones i saw were not being bought by people who study cost/benefit analysis, they were owned by rich kids who were out to impress. i and my colleagues researched & waited 18months, the rich kids had theirs the day the device went on sale.



    best

    -D
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