Palm Pre costs $138 to build, says iSuppli

The Palm Pre is not expected to formally arrive until sometime in the May-June timeframe, but that hasn’t stopped iSuppli from performing a virtual teardown analysis of the device to offer an estimate on its build cost. Working from known suppliers and inferring the rest from confirmed specifications, the market research firm claims the Pre will cost about $138 to build. This undercuts the iPhone, at $174, and even the G1 at $144.


The touch screen is expected to be the most expensive portion of the device, costing Palm about $39.51, while Qualcomm is expected to provide the wireless connectivity for $15.41 and Texas Instruments the processing power through an $11 applications chip from the so-called OMAP family of processors aimed at handsets. Other costs include the Pre’s 8GB of flash storage, tagged at $15.96, a 3-megapixel camera for $12.39 and about $22.61 in non-hardware-related costs from licensing software and royalties on patents.

The assumption is that Palm will charge exclusive provider Sprint $300 per handset, and that the carrier will likely sell the handset with a $100 subsidy. While it's hard to predict demand for the Pre, analysts figure Palm will make a healthy profit from the units it does sell.