updated 12:30 pm EDT, Wed October 13, 2010
Nokia N8 cost matches iPhone despite lower price
Nokia's N8 costs just as much as an iPhone 4 to make despite wildly varying device prices, iSuppli estimated on Wednesday. The two smartphones were in a dead heat as the N8's parts and assembly were put at $187.47, or just four cents lower than Apple's phone. It came even as Nokia used a more advanced 12-megapixel camera, an AMOLED screen and HDMI output.
Analysts saw the differences as a mater of tradeoffs. The N8's display is much lower resolution than Apple's and the industry average at just 640x360, but it's still the most expensive part of the design at $39.25. About 16GB of built-in flash memory cost $37.12, while the camera was nearly as expensive at $31.08 Its slower 680MHz processor helped offset the difference at $22.
The raw manufacturing cost flies in spite of significantly higher unsubsidized prices for the iPhone compared to the N8. Nokia charges $549 for an unlocked, carrier-independent version of the N8 through its site. Contract-free iPhones aren't readily available but have typically sold from $599 for a 16GB model. Without a carrier deal, though, Nokia's device is effectively more expensive as Apple can afford to sell its own for $199 as long as customers agree to a contract.
Reasons for the similar manufacturing costs but different retail prices aren't as clear but are likely to stem from economies of scale and support. Nokia as the world's largest phone manufacturer can potentially charge less. Apple also has its own self-run stores to maintain where Nokia often must turn to resellers. [via Bloomberg]