Palm Pre Costs $170 To Make, Says ISuppli
Palm, based in Sunnyvale, Calif., has seen its revenues shrink in recent years as smart phones from Apple and Research In Motion performed better than the company's Treos, but Palm surprised many attendees at this past January's Consumer Electronic Show with a first look at its Pre smart phone.
The Pre features both a large touch-screen interface and full slide-out QWERTY keyboard, unlike the Apple iPhone, which many observers believe could face stiff competition from Palm's most anticipated product in recent memory.
The Palm Pre's promising software and other features like 3G wireless broadband could also challenge the Blackberry Storm from RIM and the Android-based G1 smart phone from Google, say market watchers.
"The use of a multi-touch screen -- a key allure of the iPhone -- and Palm's innovative WebOS operating system, are likely to allow the Pre to appeal to a broad range of consumers, going far beyond the company's core group of business-oriented customers," iSuppli analyst Tina Teng wrote in Monday's report, which also opined that the Palm Pre "rivals ... the iPhone in terms of slickness."
Palm spends about $138 on materials to build each Pre, according to iSuppli, with an estimated total cost of hardware, manufacturing, software and licensing reaching $170. The research firm predicts Palm will ask its partner Sprint Nextel for about $300 per phone. But the wireless operator's subsidy, common practice in the mobile phone industry, could bring the consumer price of the Pre down to the $200 range -- prime real estate inhabited by the very smart phones Palm expects to compete against directly.
