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Nokia Lumia 900 touts BOM of $209, says analyst

Posted: 13 Apr 2012 ?? ?Print Version ?Bookmark and Share

Keywords:bill of material? handset? electronic component?

The recent teardown from IHS Inc. has revealed that Nokia's Lumia 900 smartphone features a cost-reduced design that underlines close cooperation among the handset maker, Microsoft Corp. and Qualcomm Inc. This cooperation seems to borrow approaches from Apple Inc.'s hardware and software development, said the market research firm. Likewise, IHS believed that this has allowed Nokia to create a smartphone that has high-end features, but uses less expensive electronic components than are used in comparable products based on Android.

The Lumia 900 carries a bill of materials (BOM) of $209, according to a preliminary IHS iSuppli Teardown Analysis. When the $8 manufacturing cost is added in, the cost to produce the Lumia 900 rises to $217. The BOM represents 46 percent of the Lumia 900's $450 retail price, without a service contract. In contrast, Samsung's S II Skyrocketan Android smartphone that has a very similar feature set to the Lumia 900carries a $236 BOM, and a retail price that is $100 higher, at $550. The Skyrocket's BOM amounts to only 43 percent of its retail price.

"With the Lumia 900, Nokia, Microsoft and Qualcomm have taken a page from Apple Inc.'s playbook by closely tying together the hardware and software to produce a full-featured smartphone that is based on relatively inexpensive electronic components," indicated Andrew Rassweiler, senior principal analyst at IHS. "One of Apple's advantages over Android has been the company's complete control of both the hardware and operating system software, helping it to produce efficient and economical iPhone designs. For the Lumia 900, Nokia and Microsoft worked in close partnership with Qualcomm to develop and optimize the software stack in order to take full advantage of the hardware. But while Apple capitalizes on its low hardware costs to attain industry-leading margins, Nokia is using this approach to offer an inexpensive phone intended to compete on the basis of price."

Nokia Lumia 900 BOM

The cooperation among Qualcomm, Microsoft and Nokia has allowed the handset firm to produce a smartphone that has high-end features, but uses less expensive components than are used in comparable products based on Android.

The Lumia 900 represents a make-or-break effort by Nokia and Microsoft to re-establish their foothold in the smartphone business. While Nokia is willing to accept hardware lower margins to carve out smartphone market share, Microsoft also is pitching in on the operating system software side.

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