iSuppli says T-Mobile G1 costs $144 to make, nothing to love

Teardown specialist iSuppli is at it again, digging through the G1's guts this time around in an effort to wrap its inquisitive brain around the inaugural Android handset's bill of materials. The result? $144, which naturally doesn't reflect HTC's R&D -- an additional expense that might have been unusually low for the G1 considering HTC's overwhelming expertise in manufacturing all things mobile. For the record, this is about $30 less than iSuppli's July estimate for the 8GB iPhone 3G, though the comparison isn't terribly fair considering that the G1 has a mere pittance of internal storage by comparison. There's no telling what T-Mobile pays HTC for each and every G1 it sells, but we pay $179 (or less) on contract -- so it seems HTC is making itself a nice little profit right out of the gate and customers aren't footing much of the bill. At least, not until they've gone a few months into their two-year agreements.

[bob sakamano @ Nov 12th 2008 2:01PM]

aren't footing much "of" the bill?

[Lowest Ranked @ Nov 12th 2008 2:17PM]

The only error there is the one you made.

[Samboini @ Nov 12th 2008 3:01PM]

http://www.thebill.com/

[High Ranks make you sterile @ Nov 12th 2008 3:39PM]

Egads!

Finally a TV show staring people uglier than me!

Hooray self confidence!

[bill cant fart @ Nov 12th 2008 3:44PM]

@High Ranks

Every TV show stars people uglier than me.

What were we talking about?

[High Ranks make you sterile @ Nov 12th 2008 6:26PM]

Oh... so we're bragging are we?

At least I can fart.... you can't!

(Unless you're not Bill, in which case I would appreciate you mocking him for me.)

[Wii @ Nov 12th 2008 2:05PM]

G1 look like crap next to the Blackberry Storm

[Dustin Hess @ Nov 12th 2008 2:24PM]

I can't wait for it to come out. I am ordering it as soon as it does.

[htd @ Nov 12th 2008 2:08PM]

how much they spent to build touch HD and X1? why are they charging so much? they really dont want to compete again iphone?

[kjb434 @ Nov 12th 2008 2:13PM]

The increase cost is more on board storage plus a proven OS with a very large customer base.

The G1 was more of a gamble. If Android in the future come to be an very invaluable phone to business users, I would see the price start to climb.

[Patriks7 @ Nov 12th 2008 2:21PM]

Yah, I also wanna see the price of the Touch HD!
I'm guessing it would be quite more than this :p

[hooeezit @ Nov 12th 2008 2:45PM]

@kjb434:
"A proven OS with a very large customer base"? Are you referring to OSX? The operating system on iPhone isn't exactly what you have on an Apple desktop, is it? It's a very tenuous claim at best that you are making. And Linux definitely does qualify as a "Proven OS with a very large customer base" - more so than OSX. If you didn't know, Android is a flavor of Linux.
On the claim of 'on-board storage' adding the extra cost, iPhone doesn't have a QWERTY keyboard or trackball as pointed out be E below. So, again, that is an apples to oranges comparison (pun unintended).

All that said, if HTC really is making the G1 at such a cost, and if their off-the-shelf markup on the G1 ($399) is representative of their other phones, Damn, theirs is the stock to buy right now!

[E @ Nov 12th 2008 2:10PM]

Should have said "not much of a comparison because the G1 has a slider, keyboard, and trackball."

[Jeremy K. @ Nov 12th 2008 2:30PM]

$144... It's being sold for $148.88 at select Walmarts. Still, even at $179.99, a $35 markup isn't that much. What's the big deal?

[Samboini @ Nov 12th 2008 3:03PM]

$35 x 1,000,000
???
Profit!!!

[bachviet @ Nov 12th 2008 5:24PM]

The $180 price is with a 2-year contract (voice + data = $65 minimum).

The retail MSRP price is $400 hence profits for both T-Mobile and HTC.

[jorvay @ Nov 12th 2008 2:34PM]

These numbers are always so subjective. Do they include marketing? Distribution? R&D? How far back did they look in the construction process?
I'm sure I could look at one of these and determine, based on the costs of raw materials, that the G1 is worth about $1.50. Sure I'd be ignoring all the added value from turning oil into plastic and rocks into circuits, clearly this analysis has ignored certain added values along the way.

[Patriks7 @ Nov 12th 2008 3:39PM]

First person with some sense!
First of all, there's more to a phone than just the parts it's made of.. you know like advertising and designing which costs a shitload..
Second, I highly doubt HTC is getting their stuff for the same price as these guys..
So this might be something around the price, but I would be betting it's more like +/- 50$ off of what they found, at least..

[MyHeadisFed @ Nov 12th 2008 2:46PM]

Yeah um...that isn't a gross amount of profit to be gawking at. Engadget really needs to stop trying so damn hard to make the g1 look like the devil....really what kind of title for an article is that? "Nothing to love"....huh? I dunno I own an LG CU500...a "normal" phone and don't side with either g1 or iPhone or Blackberry or whatever, but the amount of pro-apple bias I see here makes me nauseous. Sure they make some good products, but making every non-apple alternative sound like a ripoff is far from being honest and objective.

[A1 @ Nov 13th 2008 9:11AM]

Comprehension fail. Reread the title.

[MyHeadisFed @ Nov 13th 2008 9:57AM]

Ah yes. The comma makes all the difference lol. Parallel structure throws me off.

[Feaross @ Nov 12th 2008 2:57PM]

Who cares about the cost of the phone when service costs more if you own an iphone. You can only get an iphone for $199 with an iphone plan the money isn't in the hardware its in the software and services.

Android is open source and many apps are free, you won't see apple doing this anytime soon.

Last I heard monthly rates weren't more expensive when you owned a G1, Blackberry or Touch / Tilt.

[Unique Gift Ideas @ Nov 12th 2008 3:00PM]

Service providers don't really expect to make much profit, if any, on the cell phones that they actually sell. So things like markup really have no bearing on the matter. Cell phone providers make money on the services that they sell you and the cheaply made accessories that they shove down your throat anytime you walk into their store. I sold cellphones for a couple of years, and there IS a reason why they can afford to upgrade your phone for free.

[Samboini @ Nov 12th 2008 3:06PM]

You pay for the phone via your tariff. It probably costs Orange £10 month max for the 2000 messages and 500 minutes I use, not the £30 a month I pay.

[Kitty @ Nov 12th 2008 3:55PM]

@Samboini

Actually, you'd be surprised how much it actually costs them to provide service. A better way to look at it is not how much profit they make off each person, but how many people it takes them to reach a point of profitability.

Your '???' before profit, are the costs of doing business. They don't make any money on the phone.

[matt @ Nov 12th 2008 4:03PM]

I don't get the point. It doesn't matter how much it costs to make it; all that matters is how much is the market willing to bear. Your pair of Nikes probably cost $10 to make, but you were still willing to spend $90 on them - therefore they're worth $90.

I also don't see how they can legitimately claim to have calculated the price to that level of accuracy (down to the single dollars -$144 vs $140 or $150). Having designed and overseen the fabrication and assembly of such devices, I can assure you there are a number of costs that can't be defined to that accuracy. For example, the cost of the PCBs, enclosure, and other proprietary components would have to be guessed. They'd also have to estimate the quantity costs HTC paid for all of the components. In any case, I would bet the level of error is significantly more than $1.

And the R&D for such devices is still going to be very expensive - circuit design, PCB layout, application specific software development, etc add up to a whole lot of skilled man hours. Simply dismissing it from the cost of the final product is silly.

[VChasVD @ Nov 12th 2008 4:30PM]

I decided to take the plunge...I am excited about what the future will bring with this handset. It's quite the opposite of most phones I've owned. It will hopefully grow more useful and advanced as the platform ages. Also with my Home Depot associate discount it costs me only 139.00 even if I payed $40 for an 8gig sdhc micro I'm still looking at $20 less than the 8gig iPhone and as flash memory drops I can increase my size as i see fit. The only issue I have is the proprietary headphone/data jack, however my previous phone also had this issue, and I had no problem using an adapter, my main complaint is that this setup prevents you from being able to charge your phone and listen to music at the same time. It obviously wasn't a deal breaker for me, largely due to the fact that for the last 2 years I have learned to deal with this issue...however it may be a deal breaker for some, just not me. The BB bold was also available for 199 through ATT, however android just excites me...what can I say, I have a fetish for little green men I guess.

[Dan Davis @ Nov 12th 2008 5:51PM]

http://www.dashdepot.com/htc-3-in-1-usb-adapter/73A75A3571.htm

You're welcome :)

[VChasVD @ Nov 12th 2008 9:20PM]

You my friend are amazing...I'm new to the world of HTC products, this will deffinately be the first accessory purchase i make. Thanks again.

[Smith @ Nov 12th 2008 6:18PM]

As soon as the price drops to $150 or less; I'm buying one!

[VChasVD @ Nov 12th 2008 9:16PM]

yea, like I said...179 was ok, 148.88 better, but for 139.00 i had to jump...not many phones with the potential of this one for that price point.

[thequinox @ Nov 13th 2008 4:35PM]

I can't stand the markup they put on phones. $800! If you don't buy phones with a contract then you end up paying through the nose for them. I can't wait until phones become commodities like computers. That way I can buy what I want, when I want, for a reasonable price.

[thequinox @ Nov 13th 2008 4:37PM]

Well, that was a complete failure of a comment, apperantly I can't use "greater than" and "less than" symbols in my post, or it eats my sentance. What it should have said was:

I can't stand the markup they put on phones. Less than $200 to make it, yet for a high end phone, HTC often charges over $800! If you don't buy phones with a contract then you end up paying through the nose for them. I can't wait until phones become commodities like computers. That way I can buy what I want, when I want, for a reasonable price.