Nokia Lumia 900's bill of materials: $209

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.

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TOPICS: Nokia
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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

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Topic: Nokia

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4 comments
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  • This doesn't mean they'll make money...

    That just gives you the gross profit from each Lumia 900 handset. Nokia & Microsoft are burning money trying to market this to consumers in the US. That's a huge block of SG&A expenses. Meaning, the Lumia 900 would have to be a HUGE hit with consumers to make Nokia any money.

    http://www.tech-thoughts.net/
    sameer_singh17
  • I don't see...

    the cost of the Windows Phone 7 licence or the R&D and software development costs for customising WP7 to run on the Nokia hardware.

    Also no mention of the cost of the Nokia apps that are included, patent licensing costs...

    Hardware is only part of the story. The iSuppli breakdowns are interesting for component manufacturers, but for consumers and lay people, they are pretty meaningless, because they are incomplete.
    wright_is
  • best bang for your buck

    i have and use this phone as my primary device. it is very well built and this is best bargain for consumers in a very long time after being ripped off with other over-priced offerings from apple and others that aren't justified from any angle you look at it -- design, user experience, you name it. for those that recently purchased an iphone 4 or a top end droid ... go to an att store and see what they can do for you ... it's worth the switch. it's a steal for such a very well made device.
    ictia
    • Oxy-Clean sold separately

      Plus, Windows Phone is the bestest, most wonderfulest OS for mobile phones ever! Longer... lower... wider. Windows phone combines the flexibility of durasheen with the accuracy of cold-rolled steel. Fast, fluid, and easy to use, Windows Phone avoids the pain and suffering of the high-speed vibrating sticks. Plus, with Windows Phone you'll never be stuck without an umbrella again! Windows Phone: for when the walls are made of sunshine!
      Robert Hahn