Nokia Lumia 900's bill of materials: $209

Summary:Strong efforts from both Microsoft and Nokia have helped keep the bill of materials for the Lumia 900 to a minimum, offering the Windows Phone handset a better shot at making some money.

Nokia is betting big time on the success of the Lumia 900 smartphone, and it's upfront, cost-reduced design could really benefit the Finnish phone maker in the end.

The Windows Phone-based handheld reportedly comes with a bill of materials worth $209 (not including a $8.00 manufacturing cost), according to IHS iSuppli. Without any kind of service agreement that would subsidize the price, the Lumia 900 will retail for $450.

Here's a breakdown of the costs associated with making a Lumia 900 handset -- especially when compared to a similar, albeit Android-based device -- the Samsung SII Skyrocket, which comes with an estimated $236 bill of materials:

IHS iSuppli analysts posited that the reduced budget for the Lumia 900's hardware is primarily thanks to the single-core processor combined with low dynamic random access memory (DRAM) density requirements.

For reference, the Lumia 900 packs 512 Megabytes of DRAM with a single-core Qualcomm APQ8055 processor.

However, it's not just the hardware design that could be help saving a bundle of money. IHS senior analyst Wayne Lam also credited Microsoft for stepping up on the software side -- mainly because both partners have a lot to gain (or lose) here.

Given the highly strategic partnership with Nokia, we believe Microsoft substantially discounted its software licensing fees on the Lumia 900 to accommodate the overall lowered manufacturing costs. 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.

Chart via IHS iSuppli

Related:

Topics: Nokia

About

Rachel King is a staff writer for CBS Interactive based in San Francisco, covering business and enterprise technology for ZDNet, CNET and SmartPlanet. She has previously worked for The Business Insider, FastCompany.com, CNN's San Francisco bureau and the U.S. Department of State. Rachel has also written for MainStreet.com, Irish Americ... Full Bio

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