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Nokia Lumia 900's components cost Rs 10,000: IHS

Posted: 13 Apr 2012     Print Version  Bookmark and Share

Keywords:Lumia 900  smartphone hardware  teardown analysis 

Materials used to build Nokia's flagship smartphone, Lumia 900, cost Rs.10,000 ($209), representing 46 per cent of the Lumia 900's Rs.22,000 ($450 )retail price, said the market research firm IHS. However, when the $8 manufacturing cost is added in, the cost to produce the Lumia 900 rises to Rs.11,000 ($217).

In contrast, Samsung's S II Skyrocket—an Android smartphone that has a very similar feature set to the Lumia 900—carries a Rs.12,000 ($236) bill of materials (BOM), and a retail price that is Rs.4,950.50 ($100) higher, at Rs.27,000 ($550). The Skyrocket's BOM amounts to only 43 per cent of its retail price.

IHS' teardown cost assessment accounts only for hardware and manufacturing costs and does not include additional expenses such as software, licensing, royalties or other expenditures.

IHS

Hardware Analysis of Nokia Lumia 900

"For the Lumia 900, Nokia and Microsoft worked in close partnership with Qualcomm to develop and optimise the software stack in order to take full advantage of the hardware," said Andrew Rassweiler, senior principal analyst, teardown services, IHS.

"But while Apple capitalizes on its low hardware costs to attain industry-leading margins, Nokia is using this approach to offer an inexpensive phone intended to compete on the basis of price."

The Lumia 900 represents a make-or-break effort by Nokia and Microsoft to re-establish their foothold in the smartphone business. While Nokia is willing to accept hardware lower margins to carve out smartphone market share, Microsoft also is pitching in on the operating system software side, IHS stated.

"We believe Microsoft substantially discounted its software licensing fees on the Lumia 900 to accommodate the overall lowered manufacturing costs," said Wayne Lam, senior analyst, wireless communications, IHS. "Microsoft has had limited success with its previous Windows Phone 7 original equipment manufacturers, such as HTC, Samsung and LG. However, Microsoft now is looking to double-down with Nokia to promote Windows Phone 7 and grow the platform."

The cost reductions of the Lumia 900 hardware primarily are derived from its use of a single-core applications processor, and its low dynamic random access memory (DRAM) density requirements, believed IHS analyst.

Lumia 900 uses single-core APQ8055 processor from Qualcomm that costs Rs.841.58 ($17); in comparison, the Samsung S II Skyrocket employs Qualcomm's dual core APQ8060, which costs Rs.247.52 ($5) more at Rs.1,089.11 ($22).

The Lumia 900's design allows it to operate with only 512 Megabytes of DRAM, half the 1 Gigabyte used in the Samsung Skyrocket and most other comparable smartphones. Because of this, the Lumia 900's total memory cost amounts to Rs.1,336.63 ($27), Rs.247.52 ($5) less than the Rs.1,584.16 ($32) cost for the Skyrocket.

Even lower memory densities are possible for use with Windows Phone, allowing the development of even more cost-competitive smartphones in the future, said IHS.

Nokia Lumia 900's display/touch screen module supplied by Samsung Mobile Display costs Rs.2,871.29 ($58), or 28 per cent of the BOM. The display/touch screen module represents the most expensive single sub-system in the Lumia 900.

Micron is the supplier of the 16 Gigabytes of NAND flash memory for data storage; while Elpida Memory made the synchronous DRAM (SDRAM) in the specific Lumia 900, analysed by the IHS.





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