BusinessWeek Online has done a breakdown on what it costs to build the Motorola Q and how that price stacks up against the leading Blackberry device.
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According to market research firm iSuppli, which has done a tear-down analysis of the Q, it costs Motorola about $158 to build the phone. That includes components and assembly but excludes other expenses such as marketing, distribution, and licensing fees to Microsoft (MSFT ), which makes the phone's Windows Mobile operating system.
The Q is sold by Verizon Wireless, the joint venture of Verizon (VZ ) and Vodafone (VOD ), at a heavily subsidized $199 with a two-year service contract, and $349 with a one-year contract. Typically, the mobile-phone service provider absorbs some of the cost of subsidizing a handset or other wireless equipment. The Q's single most expensive component, says iSuppli analyst Andrew Rassweiler, is the LCD display. He says the cost is $25, although it's unclear what company makes the display. "Whoever made it didn't want to be identified," Rassweiler says. Sources of other parts of the Q are clear. Intel (INTC ) has two parts in the phone, a $19 XScale microprocessor and a flash memory chip. The XScale chip is produced by the unit of Intel that is being acquired by Marvell Technology (MRVL ).
Qualcomm (QCOM ) supplied a chip called a digital baseband processor (about $14) that helps the device connect to digital wireless networks. Rassweiler says the Q phone marks the first time he's seen that particular Qualcomm chip. Qualcomm supplied four other parts, including a power management chip. Other suppliers included Texas Instruments (TXN ); Broadcom (BRCM ), which supplied a Bluetooth chip; Freescale Semiconductor (FSL ), which supplied a USB chip; and M-Systems (FLSH ), which supplied flash memory chips. Micron Technology (MU ) supplied the CMOS imaging chip, and Skyworks (SWKS ) contributed two power chips.
HOW THEY STACK UP. The materials and manufacturing cost of the Q is higher than that of RIM's current flagship handheld device, the Blackberry 8700. The 8700 cost about $123 to make, and it sells for $299 from Cingular Wireless, owned by AT&T (T ) and BellSouth (BLS ), and from Deutsche Telekom's T-Mobile (DK ).
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