Commentary
1/29/2009
10:12 AM
Eric Ogren
Eric Ogren
Commentary

iSuppli: BlackBerry Storm Innards Cost More Than The iPhone's

iSuppli sunk its teeth into the BlackBerry Storm to see what the sum of its parts is really worth. According to its analysis, the Storm costs RIM about $203 to make. Verizon Wireless is selling the Storm for $199 (after rebates). Apple's iPhone 3G costs about $174 to make and sells for $199/$299.



iSuppli sunk its teeth into the BlackBerry Storm to see what the sum of its parts is really worth. According to its analysis, the Storm costs RIM about $203 to make. Verizon Wireless is selling the Storm for $199 (after rebates). Apple's iPhone 3G costs about $174 to make and sells for $199/$299.iSuppli's analysis of device components is revealing in the most peeping-tom sort of way. Being able to see what the devices actually cost the manufacturers to build, and then compare them to the MSRP and actual selling price gives us a good idea of who's making what on their hardware.

The difference between $203 and $174 may not sound like a big deal, but multiply that by the millions of units sold and there's clearly a significant dollar value involved. The iPhone 3G 8-GB model is clearly a more profitable device to make than the Storm if you compare the cost to make it and its retail price.

Why does the Storm cost more? Remember that the iPhone 3G has many of the same components as the original iPhone. Apple was surely able to negotiate for better prices based on that, and, in fact, the 3G iPhone costs less to make than the original iPhone. The Storm is RIM's first-generation touch device. It also has a very expensive processor inside from Qualcomm that costs $35 per phone. The Storm is able to work on both CDMA and GSM/EDGE networks. Having both sets of radios inside certainly adds to its cost.

None of these dollar amounts includes the cost to develop, market, ship, and support the devices.

We also don't know under which terms Verizon has purchased the Storm from RIM, nor the terms under which AT&T has purchased the iPhone from Apple. Not knowing the whole story can only let us guess at who's really making more money. The fact remains, however, that the Storm costs more to make than the iPhone.

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