Report: The Palm Pre Costs About $170 To Manufacturer

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imageThe highly anticipated Palm (NSDQ: PALM) Pre is estimated to cost about $170 to build and will be sold to carriers for around $300, according to iSuppli, which looked at the phone’s components to come up with the costs, Reuters reports. The cost includes hardware of $137.83, manufacturing and basic test costs of $9.58, and software and licensing costs of $22.61. It does not include shipping or marketing costs.

BusinessWeek reports that the preliminary analysis suggests the company will make a healthy profit from each unit sold. If you just look at only the hardware costs of $138, that would amount to a 46 percent profit margin because Sprint (NYSE: S) is likely to sell the handset for $200, after a $100 subsidy.

2 Comments

jason justing

Wow. THat means Palm will not earn money at all considering such a lengthy devlopping cycle , huge marketing cost for weak carrier sprint + weak manufacturer palm. It would be even hard for them to succeed while IPhone + black berry is already taking more 90% market share. Hope Palm can be bought by someone.

Jamie Poitra

I can't imagine that iSuppli's estimate of Software and licensing costs of 22.61 is anything but a wild guess.

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