Electronics Production |
Low Cost is More Than Just Skin Deep for Motorola's Q
Available for as little as $200, the Motorola Q has set a new low point for smart-phone pricing. And with a materials and manufacturing cost of only $158, the Q has achieved impressively low production expenses as well, according to research from iSuppli Corp.'s Teardown Analysis Service.
iSuppli's dissection of the Q reveals that the new smart phone's material cost, i.e. the total value of all its components, amounts to $150. When manufacturing expenses are added in, each Q costs $158 for Motorola to make, excluding outlays beyond the production of the Q itself, including shipping, logistics, marketing and other channel expenditures.
The Q's low production cost is reflected in its aggressive pricing. Verizon Wireless, the exclusive seller of the Motorola Q, is offering the product for $199 with a two-year contract. With a one-year contract, the Q's price rises to $349.
The smart phone's combination of low pricing and inexpensive design will be key assets for Motorola as it vies for market share against established rivals, iSuppli believes.
"Given the Q's price point, and Motorola's overall market leverage, this phone likely will succeed in reducing the pricing for smart phones overall-boosting acceptance among users who might flinch at the higher-than-$200 price point established by previous Personal Digital
Assistant (PDA)/smart-phone products." said Andrew Rassweiler, teardown
services manager and senior analyst for iSuppli.
