iSuppli: $202 materials & manufacturing cost for RIM's Storm

The BlackBerry Storm 9530 carries a combined materials and manufacturing cost of $202.89, according to iSuppli’s Teardown Analysis Service. This cost includes all parts and manufacturing costs for the Storm but excludes other expenses, including Intellectual Property (IP), royalties and licensing fees, software, shipping, logistics marketing and other channel costs. The attached table presents a summary of iSuppli’s teardown analysis of the Storm. In the United States, Verizon is selling the Storm for $249.99 with a $50 rebate, bringing the balance to $199.99—the same selling price point as iPhone. However, carriers like Verizon and AT&T sell their mobile phones at subsidized pricing, so the actual price and materials/manufacturing margin for the product is difficult to determine. Storm vs. iPhone The Storm matches up with the iPhone 3G very well in terms of attributes and functionality. Both phones combine wireless voice communications with a range of other convergence features, including Internet access, e-mail, built-in GPS, messaging and an integrated camera. The Storm features a color TFT-LCD display that is 3.25-inches in the diagonal dimension, with 65,000 colors and a 480 by 360 pixel resolution. However, the inclusion of the touchscreen is what really puts the Storm into the same class as the iPhone 3G. “The touchscreen and the resulting user interface represent the focal point of the Storm’s design from the user’s point of view, as it is with the iPhone,” said Andrew Rassweiler, principal analyst, teardown services manager, for iSuppli. “However, RIM has added a special differentiating feature from the iPhone: the ‘clickable’ screen. The one thing that existing touchscreens lack is the feedback mechanism users get from a conventional keyboard that clicks when a key is depressed, letting you know quickly that your choice has been registered. Clearly, RIM felt this was lacking and added an actual physical button that allows users to feel and hear a click when they make a selection on the display.” How does the Storm’s clickable screen compare with that of the iPhone? “While the Storm is very competitive with the iPhone in terms of features and hardware, it does not have iPhone’s multi-touch technology,” said Tina Teng, senior analyst, wireless communications, for iSuppli. “The Storm uses a simple physical button under the primary touch screen to serve to provide haptic feedback. This allows one physical key press at a time, meaning there is no double-tapping capability with the Storm.” On the other hand, the Storm is capable of roaming with more operators globally than the iPhone due to its support for the EvDO air standard, along with CDMA 2000, GSM, WCDMA and HSDPA. This allows Verizon’s Storm users to roam around the world without having to rent a separate device, depending on operator restrictions. The Storm, when compared with the Apple iPhone 3G, is marginally more expensive and complex in terms of sheer component count. iSuppli in July issued a preliminary estimate of $174.33 for initial production costs for the 8Gbyte iPhone 3G, $28.56 less than the Storm. The Storm’s total component count is 1,177, of which 151 are mechanical in nature. The iPhone 3G includes 1,116 components. “The higher cost and component cost of the Storm is to be expected, given its support for both 3GPP- and 3GPP2-based technologies,” Mr Rassweiler said. BOMs away The $202.89 BOM/manufacturing cost of the Blackberry Storm 9530 consists of $186 for components and other materials, and $16.07 for manufacturing. This total is about $27 more expensive than the Bold, another smart phone model from RIM, based on pricing from October 2008, according to iSuppli’s Teardown Analysis Service. The cost differential is mainly accounted for by the touchscreen and its supporting electronics, according to Francis Sideco, senior analyst, wireless communications, for iSuppli. Qualcomm scores design win The use of the Qualcomm MSM7600 baseband processor represents the first time iSuppli’s Teardown Analysis Service has detected a part from this manufacturer in a RIM product. Previous teardowns noted that RIM employed Marvell chips for this function. For example, the Bold used Marvell Technology Group Ltd.’s PXA9xx Integrated Baseband processor. The Qualcomm part not only provides support for the EvDO air standard, making it a more of a worldwide phone, but it also eliminates the need for multiple basebands and radio frequency chains, saving some cost. At an estimated price of $34.82, the MSM7600 accounts for 17.2% of the Storm’s total component cost. Qualcomm also provided two RF transceivers and a power management Integrated Circuit (IC) for the Storm, giving the company a 21.1% share of the total component costs for the product. Other component supplier winners in the Storm include: · Synaptics, which contributed a $15.50 capacitive touchscreen overlay. · SanDisk, which provided an 8Gbyte MicroSD memory card priced at $11.50. · Samsung Electronics, which supplied a $7.50 Multichip Package (MCP) containing 8Gbytes of Multi-Level Cell (MLC) memory. Image Source: RIM