Palm Pre: $138 to build according to iSuppli
by Laura June 
posted Apr 29th 2009 at 10:49AM
With the economy in the tank (still) and the heat on, cost and profit margins are more important than ever to companies hoping to stave off the inevitable, apocalyptic doom of recession. Well, iSuppli's released an estimated report of how much its costing Palm to cobble together the Pre -- about $138, as it turns out. iSuppli has positively identified just two of the Pre's suppliers thus far -- that Texas Instruments OMAP chip, which runs Palm $11, and Qualcomm's wireless chip -- but they've formed a general picture of what's under the hood for the estimate. That price is about 46 percent of the $300 iSuppli suggests Palm will be charging Sprint for the Pre (a number that's completely unconfirmed at this point). To put it in perspective, the BlackBerry Storm costs about $203 to make and was sold for $199 initially, the G1 clocked in at $144, while the iPhone 3G costs Apple an estimated $174.33. Of course, we have no way of assessing the accuracy of the estimate yet, but if it's in the neighborhood of correct, Palm's profit margin should be pretty healthy.
Reader Comments (Page 1 of 1)
darthvegas @ Apr 29th 2009 10:53AM
I want a release date....and I want it now.
EV-D'OH! @ Apr 29th 2009 2:25PM
June 7th
Crunch @ Apr 29th 2009 11:58AM
It's all about money. They do not care about you.
Eddie @ Apr 29th 2009 1:28PM
makes you wonder how the touch diamond and pro can cost so much. What was it? like $800 to the consumer for an unlocked version.
EV-D'OH! @ Apr 29th 2009 2:25PM
You're right, they don't care about you—and why should they?
Like most any corporation, they care about bringing a competitive prduct to market and realizing a reasonable profit. A keystone (100%) markup is not unsual in any industry.
Vishal @ Apr 29th 2009 3:00PM
There is a cost to design, R&D, software development - that all adds up. It's not just a bunch of hardware pieces put together.
Sven Johannsen @ Apr 29th 2009 10:37PM
I have to agree with Vishal. I get a little tired of iSuppli estimates that guess at what's in the device and come up with a figure based on raw parts. In this case the article actually comes up with closer to $170 when they add in some less tangibles like licensing, etc.This is worse than totalling up the materials in a house and claiming that's what it costs. There is engineering, design, tooling, and a substantial amount of up front cost in getting the parts at the quantity needed to make even considering producing it. They make it sound like they make $120-$500 on each one of these they sell. Might start seeing some actual return after you sell 100,000-500,000 or something, but you have to recoup your investment before you start swimming in profit. think iSuppli should be liable to build one for the cost they broadcast.