Andy Rubin, the head of Android is quoted in Ken Auletta’s Googled as saying a smartphone “shouldn’t cost four hundred dollars. That’s absurd. If you add up all the components, somebody is making a lot of money.”
According to iSuppli, he’s right! It did a teardown analysis of the Nexus One and found it has component costs of $174.15.
Of course, this doesn’t take into account manufacturing the phone, packaging it, shipping it, marketing it, or any other costs that make the phone retail for $530. We also don’t know what cut Google takes on the phone and what cut HTC takes.
So maybe it’s not so “absurd” after all?
Regardless, the low material costs are impressive, since it has “the most advanced features of any smart phone ever dissected” by iSuppli. The iPhone 3GS, which is a less powerful, less advanced piece of hardware, had a material cost of $178.96, when iSuppli did an analysis last June.
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