iSuppli recently published an estimate of the build-cost of the Palm Pre. Given iSuppli’s pretty reliable history of similar estimates, the comparatively low price of the Pre raises some interesting questions. Is it in fact a sign that the Pre has a hardware Achilles heel?
iSuppli prices the Pre at $138 to build. That comes in significantly less than the iPhone 3G at $175, the T-mobile G1 at $144 and much much less than the Blackberry Storm’s large $203 build cost.
At first glance, the low price translates into a potentially higher profit margin for Palm, or a potentially lower cost for would-be buyers. But at second glance, it could merely be a sign of something different: cheaper components.
Inside the Pre is nothing essentially different from what’s inside the devices of its existing competition–there’s a standard chipset for telephony, processor, sensors, screen, battery, camera unit, etc. Given the iPhone’s success, it would be safe to presume that many component manufacturers have been churning out a range of compatible hardware, and as a result the prices should be lower.
We’ve already questioned the phone’s battery capacity, and as a result of this new data from iSuppli, dare we suggest the Pre’s Achilles heel could signal a lack of internal electronic innovation? After all, the adage “you get what you pay for” is still valid, and in this case it translates into an implication that the Pre simply doesn’t contain cutting-edge electronics.
Sure, you could point out that it’s clear that the Pre’s major selling point is its clever and interesting WebOS, but for the Pre to really hold its own in a smartphone market that’s continually evolving, it’s hardware is going to matter too. As games or specialist apps push the Pre’s processor to its limits, will a seemingly cheap-and-cheerful smartphone cut the mustard? It’s an interesting question, especially with the iPhone version 3 coming around the same time as the Pre, with both new hardware and software aboard.