BlackBerry Storm found pricier to build than Apple's iPhone 3G

Posted:
in iPhone edited January 2014
An insistence on a physical feedback screen and dual-network support has pushed the cost of making Research in Motion's BlackBerry Storm significantly above that of current-generation iPhones, hinting that Verizon may be paying more to rival AT&T in touchscreen phones.



Research house iSuppli has conducted a teardown which puts the price of assembling RIM's first touchscreen BlackBerry at $202.89, not including marketing, shipping and other costs involved in getting the phone to customers.



The expenses result in a phone that, in some circumstances, actually costs more for its American carrier Verizon to sell than it does to produce. While the normal retail price is just short of $250, the online pricing puts the phone at $200.



As such, the phone may cost more to subsidize than its most direct challenger at AT&T, Apple's iPhone 3G. A teardown conducted by iSuppli in July revealed that the iPhone cost a more modest $174.33 just days after its launch -- a figure that may have decreased over recent months as each individual part gets less expensive to build, and $28.56 less than the BlackBerry.



That difference is explained by RIM's decisions to include certain significantly more components, iSuppli says. Since Verizon wanted the BlackBerry to support both its own CDMA and EVDO networks as well as the GSM and HSDPA of its European partner Vodafone, RIM has had to include a Qualcomm processor that costs $34.82 by itself, or about 17.2 percent of the pure manufacturing price. Apple's phone needs only to connect to GSM and HSDPA and can use less expensive equipment to match.



In trying to address complaints that touchscreens lack physical feedback during button presses, RIM has also given the Storm a click-down screen that touches a button below. This requires a special capacitive touchscreen overlay from Synaptics that adds $15.50 to the phone's bottom line.



iSuppli bill of materials for the BlackBerry Storm.



And while the features add to the price, the cost difference doesn't equate to a one-for-one improvement. The BlackBerry's screen doesn't support the complex multi-touch of the iPhone and is actively limited by the need to push downwards to register most actions, where Apple's touch-only input is quicker and more complex.



"The Storm uses a simple physical button under the primary touch screen to serve to provide haptic feedback," iSuppli senior analyst Tina Teng says. "This allows one physical key press at a time, meaning there is no double-tapping capability with the Storm."



Wi-Fi is also absent from the smartphone.



Whether or not the pricier hardware dents the profits of Verizon as much as it does AT&T is still a matter of debate. Given the flexibility of carrier discounts, Verizon isn't automatically forced to pay more to put the BlackBerry Storm's price tag close enough to the iPhone to remain competitive.

Comments

  • Reply 1 of 9
    virgil-tb2virgil-tb2 Posts: 1,416member
    The Storm is indeed a piece of junk but I'm starting to think it might sell after all.



    In Western Canada, to get the iPhone you have to get a contract with Rogers/fido, but neither outfit advertises the iPhone at all. Sure there is a picture or two on their website (on a separate page from the "regular" phones), and a demo model (one only) in most of their stores, but it's not mentioned in their advertising at all as far as I can tell.



    However, everywhere you go there are fido and Rogers ads and posters advertising the Storm, the Bold and maybe a few LG phones and that's about it. I don't know if Riim is paying these guys to not run any iPhone ads but other than Apple's ads on the TV, there is virtually nothing.



    Today on the way home from work I saw four or maybe five people using a Storm (one I wasn't sure), which is a ridiculous amount considering how bad the thing is and boy did they look perplexed trying to make it do anything.



    I guess my point is that with the cell carriers giving Apple basically no support for marketing the iPhone, it's amazing it sells at all. And with the virtual blizzard of advertising going on for Riims products, I could see lots and lots of people buying this POS.



    The average person is not a genius and gets what the salesperson pushes at them. In my part of Canada at least, the iPhone is not being pushed by the carriers at all, while the Storm most definitely is.
  • Reply 2 of 9
    The removable battery alone adds a lot to the cost of making the device, more manufacturing of the little parts that allow you to replace the battery, not to mention you now have to make an interface, and add protection to the battery itself. The Storm also contains upgrade slots for the Memory, which would make sense if the OS's maximum limit wasn't what was already included with the phone. And that movable "Click" Screen, more added cost for something that so far I have seen no benefit from.
  • Reply 3 of 9
    Your description of this is inaccurate. Verizon is not paying TO AT&T is is pay more THAN rival AT&T.
  • Reply 4 of 9
    ivladivlad Posts: 740member
    Blackberry had to follow their old route and that's where they end up, they think by stepping into the touch-screen market they can compete against iPhone, but with the same old philosophy that's not gonna work. It's true a lot of those moving parts add weight and material and engineering but they just don't have the software integration with hardware that Apple nails with their products, and by that making them much cheaper to make in the end.
  • Reply 5 of 9
    Quote:
    Originally Posted by iVlad View Post


    but they just don't have the software integration with hardware that Apple nails with their products, and by that making them much cheaper to make in the end.



    Can you explain that please? I would love to know why you are so certain that RIM do not have the "software integration with hardware". Sounds a very odd thing to say.
  • Reply 6 of 9
    foobarfoobar Posts: 103member
    Quote:
    Originally Posted by Virgil-TB2 View Post


    but neither outfit advertises the iPhone at all.



    Quote:

    However, everywhere you go there are fido and Rogers ads and posters advertising the Storm



    Yet how many people do you know that have heard of the iPhone? And how many have heard of the Storm?



    Apple is very lucky to enjoy a lot of free publicity...
  • Reply 7 of 9
    zunxzunx Posts: 620member
    Waht is needed is a free iPhone (free, no contract). As the ones sold in Hong-Kong and Italy, for instance. But for all other countries as well.
  • Reply 8 of 9
    Quote:
    Originally Posted by zunx View Post


    Waht is needed is a free iPhone (free, no contract). As the ones sold in Hong-Kong and Italy, for instance. But for all other countries as well.



    Apple can't make any money off the carrier then....doh....see Apple profit margin

    is a combined equipment and carrier kick back. If not well see $400/$500 iphones.
  • Reply 9 of 9
    Quote:
    Originally Posted by Fast Fred 1 View Post


    Apple can't make any money off the carrier then....doh....see Apple profit margin

    is a combined equipment and carrier kick back. If not well see $400/$500 iphones.



    You can buy a contract free iPhone in Australia for $800.
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