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Palm's Pré: the $170 phone

Yet could cost only $200 to buy

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The Pré smartphone could cost just $30 (£20/€23) more to buy that it actually costs Palm to make, according to a report by market analyst iSuppli.

iSuppli forecasts that the phone will sell for roughly $200 (£135/€150) when it eventually comes to market. That’s despite a cost analysis calculating that that each unit will cost Palm $170 in components to produce.

Alas, iSuppli didn’t actually rip open a Pré to arrive at the figure. The company stressed that it simply calculated what the phone would probably cost to make based on Q2 component pricing and assembly rates from own projection of future manufacturing costs for handsets.

The bill-of-materials cost of Apple’s iPhone 3G have previously been calculated by iSuppli. It’s total estimated cost? Just $100.

Of all the components that go together to make up Palm’s Pré, iSuppli thinks the 3.1in, 320 x 480 display is the most expensive – costing just shy of $40. Software and licensing will be Palm’s second most expensive Pré outgoing, totalling $22.61.

The total value of hardware components inside the Pré is $137.83. The battery will cost $4.16, while its applications processor should cost around $10.97.

Pré’s cheapest component, iSuppli thinks, will be the GPS chip – thought to cost Palm just $1.09.

“The similarity in features between the Pré and the iPhone clearly reveals the mark Palm is trying to hit,” said Tina Teng, senior analyst for wireless communications at iSuppli. ®

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