The Palm Pre will cost an estimated $138 to build, according to BusinessWeek. That’s half of the expected $300 price per phone it will cost Sprint, which in turn could sell them for $200 after a $100 subsidy.
These numbers are estimates from iSuppli, a research firm that tears apart smartphones and other electronics in order to figure out how much they cost and which companies supply the components. Because iSuppli hasn’t been able to get a Pre to dismantle, the company estimated based on experience. Here’s the rundown:
- Texas Instruments OMAP chip costing $11 (confirmed)
- Multi-touch display and related components costing $39.51
- 8 GB of flash memory costing $15.96
- Qualcomm wireless components costing $15.41 (confirmed)
- 3 megapixel camera (possibly from Aptina) costing $12.39
- Licensing software and royalties on patents costing $22.61
Obviously these numbers don’t quite add up, but iSuppli figures all of the hardware will cost $138, or46 percent of what Palm is expected to charge Sprint leaving the handset manufacturer with an impressive margin. Adding in pre-installed software and patents could boost the total cost for the finished Palm Pre to $170, still only 56 percent of the unit price.