T-Mobile G1 Or iPhone 3G: Which Costs More To Make?

T-Mobile G1 Google Apple iPhone 3G

The report indicates that the bill of materials cost for the T-Mobile G1 hits about $144 while the 8-GB Apple iPhone 3G carries a bill of materials of roughly $160. On the pricing side, T-Mobile offers the G1 for $179 with a contract—though some Wal-Mart stores offer the T-Mobile G1 for about $30 cheaper—while the smaller iPhone 3G model carries a $199 price tag.

The two touch-screen devices both offer voice communication, e-mail, mobile Internet access, cameras and music playback. The G1, however, adds a full physical QWERTY keyboard, which the iPhone lacks; and the iPhone's touch interface uses multitouch, which the G1 does not.

But it's the G1's ties to Google Android that set it apart, according to Tina Teng, iSuppli senior analyst of wireless communications.

"The G1's differentiation resides in its use of the Android operating system, which has won praise for its ease of use but whose major advantage is its integration with Google Internet services and its capability to accommodate the flood of free applications that are becoming available," Teng said in a statement.

The $144 estimate to make a G1 is based on component and materials costs and does not account for other expenses like software, research and development, manufacturing and accessories, according to iSuppli, which added that it has yet to conduct an actual physical teardown of the smartphone.

The most expensive part of the G1 is the baseband, iSuppli said, which costs around $28 for each device made. The baseband is followed by the 3.2-inch TFD-LCD flat touch-sensitive screen with HVGA resolution display, which runs nearly $20 per device. The 3.2-megapixel camera runs just more than $12 per handset, while the radio frequency/power amplifier portion of the device, which supports the 3G network connection, costs just less than $10.

Despite calling the G1's interface better than the industry average, Teng noted that the G1 "still has a gap to close with Apple's interface" and that the handheld "lacks the wow factor of some of its slicker competitors."

Teng wrote that while both devices support downloading music, G1 users must employ Wi-Fi connectivity to do so while iPhone users do not.

"This is a negative for G1 users when there's no Wi-Fi coverage," Teng said. "Apple really makes the music download experience transparent; everything is integrated smoothly and seamlessly."

Teng added that the G1 lacks "enterprise friendliness," which could be seen as a pitfall, noting that the iPhone and other platforms like the BlackBerry Bold are perceived as more enterprise compatible. Teng said the G1's support of POP3 e-mail and lack of support for Microsoft's ActiveSync e-mail system will keep it out of enterprise doors.

Still, Teng wrote, G1's Android guts and the availability of free open-source applications will keep it relevant and maintain the perception that the G1 could be the next true iPhone killer as it battles touch-screen titans like the iPhone and the soon-to-be released BlackBerry Storm, Research In Motion's first-ever touch-screen smart phone.

"Each day there are about five or six new G1 applications for download," Teng said. "Eventually the G1 will have its own software community, much like the Linux applications in the wired world or the Sun OS has for workstations. This will produce a rich suite of free software for a variety of purposes that anyone can access."