By iSuppli has published the BOM (Bill Of Materials) for the Nexus One which essentially lists all the hardware components that go into building the Nexus One. The grand total is $174.15 in supplies but keep in mind this does NOT include assembly, manufacturing costs, inventory costs, transportation of parts, etc…
Here is the full list:
Interesting to note the most expensive elements:
- $30 – Qualcomm’s 1GHz Snapdragon processor
- $23 – AMOLED Display from Samsung
- $20 – 4GB Nand Flash from Samsung
- $17 – Capacitive touchscreen from Synaptics
With just these 4 elements of the phone you’re already up to $90+ and let’s not forget the cost of R&D, paying employees to do all of the work involved, all the various overhead – it’s actually pretty amazing that the devices we purchase are so (relatively) affordable.
It would be even MORE interesting to see how manufacturing costs, R&D and everything else associated with making a phone plays into the total cost, but unfortunately we’ll never find that sensitive information out.
Is this for individual orders of each part? I would assume they(HTC/Google) would have a contract with each manufacturer to buy, say 1 million of each part and would get a significant discount. I don’t think we’ll ever really know what any phone truly costs because we’ll never see their contracts and every company probably gets a different deal. We can make assumptions all day, but you know what happens when you assUme…
$530 dollars is not affordable.
The beer exits from the Factory with a cost of maybe 10 cent…
But when you buy it in the bar it cost 3-4$
Think at the material to produce an Armani T-shirt, and then the cost of that t-shirt…
And so on…
That’s how trade goes.
Interesting that the battery only costs $5.25…
@derrick: you second your comment about the bulk purchase… but when you factor in labor to assemble… it probably balances out.
@rock: actually $530 is a pretty good price if you look at the cost to buy most phones without a contract. The Bold is around the same and many of the popular from Nokia are in the $600 range. We in the states are just used to getting our phones dirt cheap with contracts. Wee like to complain about our carriers, but they gives us good discounts on phones (which they later make up in the price of service). And with smartphones, you are essentially holding a device the size of a calculator with the processing power greater than PCs 10 years ago. The Snapdragon is a 1GHz processor.
rock: what is the TOTAL cost of the phone+plan? A phone without a plan is pretty useless.
an electronics device costs much less to make than what it is being sold for.. what a scandal.
this is the first time i’m posting after FINALLY buying an android handset…and I’m happy with my choice, i might add :)
@Mikey: this is just the cost of the pieces….to put it all together would be more expensive.
530 seems a little high *but* like everyone has mentioned, it does cost money to ship, assemble, etc. Let’s also not forget that they need to make a profit on these things. I wouldnt exepct them to just cover their costs and walk away.
The average wage of a factory worker at a top cell phone plant like BIRD in China is about $300 a month, so about $15 a day. Take that on an 8 hour day,a dn you are talking about $2 an hour, and take the time for assembly at 20 minutes, and you are at under $1 for assembly….times that by 4 to account for the factory overheads,a dn you are talking an assembly cost of $4….all of these numbers are rounded way up, so that is goign to be the maximum cost of assembly…The discounts for bulk purchase are going to be a lot more than that….
I also remember there being talk abotu an import database which you can search to see what the import cost of all goods brought into the states is. a bit of research in that database (I think it had a subscription price of about $200 a year) and you can find out at what price they imported it, and you aren’t really allowed to fake that.
R&D is not really put intot he individual price of most products, as they either try to mark it up so much to cover whatever cost they have, or they work with a slimmer margin to generate more volume to cover it.
Will Google offer self-assembly kits?!
So Google could have dropped the price a little…As Rock said, isn’t affordable at $530
wah wah wah- my coffe mug is made of sand and clay i could buy in my back yard yet they have the nerve to charge me for it.
wah wah wah- the electons that MS uses to make their software run on my laptop costs them NOTHING yet they charge me to buy office.
wah wah wah- (my favoite repeated like 3 million times a day all over the net)- verizon charges soo much more than the other carriers- what a ripoff?1
wah wah wah- I’m a congressman and the country is going bankupt but i think it’s important to investigate why per text message costs have risen in the past few years.
GROW UP PEOPLE. The cost of goods sold has very little to do with what the ingredients cost. It’s more about what the market will bear. Google decided for whatever reason that $530 was the price they wanted to charge. Prices directly related to the cost of the parts is just not what happens in the world.
If you think it’s a “rip-off” maybe they did it on purpose to keep such haters/whiners/complainers away and rather just keep the inital lunch to the fanboys to help them smooth out the bumps related to releasing a new product. They are already getting a certain amount of bad mojo from “all the issues” at launch.
Could also be that they dont want to market it so the masses see it ealted at all to anything like a ‘feature phone’. If it costs the same price as a POS then to a degree it will get viewed by some as a POS.
And I doubt anyone can just call qualcomm up and buy ONCE CPU- so of course the pricing is somewhat related to buying in bulk. I’m sure those are not the prices that someone pays when buying a million but it’s not like the cost is one tenth that.
Did you expect anything else. After adding development, marketing, manufacturing, management and many, many other costs you are not that far away from $530.
Heh. I like you you list the cost of the parts, as if that’s how much it costs Google to deliver the phone. Then you concede that, “Well, that doesn’t include the cost of assembly, transportation, etc.” …uh, what about the cost paid to HTC, research and development, design, software development, marketing, administration, returns, etc? Ever wonder how many Google employees are behind this project? They all need to be paid (including benefits). At $174.15, I’m surprised Google is able to deliver it as inexpensively as they are.
How much are the parts cost on the muerto-rola droid?
If you think $530 is a scandal or that they could have charged less, then why don’t you simply start your own company, hire the engineers to design/test/assemble the phone and release your own phone for far less? I’m sure you will make a killing selling the same exact phone for less money.
If anyone has a problem with the markup, then you should find your own suppliers and buy each part separately. Then you can put it together. Good luck with that.
The manufacturers have something you will never have……ECONOMIES OF SCALE!!!
The parts certainly are cheaper than that list, however for most electronic devices it cost more to assemble, package and ship than the parts themselves.
You folks are completely ignoring the initial R&D cost, the after sell support cost (including warranty), marketing cost…
I estimate the actual price to market is probably $350-$400, which is why most electronics drop in price by 15-25% after the first 6 months.
@Yeath:
Exactly! Those costs are high, and the equipment is expensive as well unless you contract everything out. If you think you can do things for less, then look into the cost of pick’n’place machines, annual tech support and maintenance contracts for them, a reflow oven, and a building to house it all.
Yeath left out the fact that it will take months or years from the time you hire your engineers and managers to the time you have a prototype, and even longer before you can begin manufacturing it. You will need a loan to pay them, and of course you’ll have to pay a lot of interest on that loan.
All you whiners are only proving your lack of intelligence.
Yeah compared to other unlocked phones this is a reasonable price I guess but like I said earlier it is not affordable. I’m. On T-Mobile and unfortunately I’m on a family plan so only option for me is to put out 530 dollars. And like the others said, then comes the contract…
I for one don’t think the Nexus is over priced…comparatively speaking. However, some of these retorts, like “if you don’t want to pay then you build it yourself!!11!!!” or “Of course there’s a markup, that’s the business! “, are missing the point. Being gauged, though very capitalist in nature, and therefore expected, does not make it right.
So it’s okay to be raked over the coals for a phone at laptop prices because every other company does the same thing? Okay then…carry on goose steppers!
I think its still working out cheap considering the assembly cost is far less in china than in any part of the world. All R & D must be done in the US where the pay is steeply high and this should be compensated for during assembly. Else the price of the device will be more than a $1000 in case of iPhones and other smart devices.
there is no other way to bring down the cost as already the components and raw materials are at its lowest possible pricing.
Costs also included in the sale price
1. Parts
2. assembly labor
3. Miscellaneous payroll (the guy that clean the factory needs to get paid too)
4. packaging
5. warehouse storage
6. shipping
7. marketing
8. Research and Development
9. Software (while Android is free some of the other stuff isn’t)
10. Customer support services
11. And finally profit. Most companies only make pennies on the dollor for a devise like this.
.
I am not trying to say Google and HTC are not making money. This is an expensive device. Just realize that more then parts and cheap Chinese labor goes into the cost calculation.
I forgot about the big one: Factory Operation. Some part of the price has to go just to keep the lights on in the Factory. Without power and maintenance the phones do not get built.