Nexus One Manufacturing Costs Revealed

The Nexus One smartphone, which is manufactured by HTC, is costing Google approximately $174.15 (£107.85) to make.

So said research firm iSuppli, which also noted that the Nexus One has a noise-cancellation processor that it has never seen before, as well as a unibody design shared only by the iPhone.

Its estimated bill of materials (BOM) tally is a conservative one, the firm said in a 8 January report, as it accounts for hardware and component costs but not expenses such as “manufacturing, software, box contents, accessories and royalties.”

Google sells the Nexus One unlocked for $529 (£328), or with a two-year service contract with T-Mobile for $179 (£111).

“With the Nexus One, Google has taken the most advanced features seen in recent smartphone designs and wrapped them up into a single sleek design,” wrote Kevin Keller, an analyst with iSuppli, in the report.

“Items like the durable unibody construction, the blazingly fast Snapdragon baseband processor and the bright and sharp Active-Matrix Organic Light Emitting Diode (AM-OLED) display all have been seen in previous phones, but never before combined into a single design,” Keller continued. “This gives the Nexus One the most advanced features of any smartphone ever dissected by iSuppli’s Teardown Analysis Service – a remarkable feat given the product’s BOM is similar to comparable products introduced during the past year.”

iSuppli has estimated a BOM of $172.46 (£106.80) for the Apple iPhone 3G S and a BOM of $170.02 (£105.29) for the Palm Pre.

The most expensive item on the Nexus One’s bill is its 1GHz Qualcomm Snapdragon processor, which iSuppli estimates at $30.50 (£18.88). Qualcomm also supplies the phone’s power management technology and radio-frequency transceiver, each estimated at a more modest $2.50 (£1.54) a pop. Combined, this gives Qualcomm 20.4 percent of the Google phone’s BOM, making it the manufacturer to reap the highest dollar revenue from the device.

According to iSuppli, it’s money well-spent.