In a fiscal climate where profit margin reigns
intensely supreme, we've got yet another dollop of bad news to heap upon the parfait of pain that is the $199 (after $50 mail in rebate) BlackBerry Storm. Research firm, iSuppli, estimates that the cost for the components and assembly of RIM's BlackBerry Storm are just shy of $203 -- an estimate that does not include software development and uh,
bug fixing costs or those attributed to patent licensing, physical distribution, marketing or anything else in the product lifecycle. The most costly component is the $35 Qualcomm MSM7600 processor that gives the Storm its dual GSM / CDMA personality. Now, $203 isn't that big of a spread compared to the per unit cost of a
$175 8GB iPhone 3G, $169 BlackBerry Bold, or
$144 T-Mobile G1. However, the lost
prophets profits add up quickly when you've moved over
a million units globally.
P.S. We're not implying that RIM is losing money here (the price is obviously carrier subsidized), only that the Storm is likely less profitable than its peers. But without knowing what VZW pays on a per unit basis, we can't say for sure who's getting the fiscal-shaft.
posted Jan 29th 2009 4:46AM
Um.. I'm not one to complain, but, This article is misleading. They really have nothing to do with the subsidized price. That all Verizon. I can guarantee that Rim is not selling the device for under the subsidized price. They have no razor blades to sell to justify selling under manufacturing cost. The only real fact is ..yeah they may not make as much per unit as the Iphone. big woop. its also not their only product like apple. So the could be making more per unit on a lot of the other phones. If I want sensationalism in my articles I'll go to TMZ.
I'm pretty sure that they mean it is less profitable for Verizon/Vodafone etc. Who are compelled by the market to sell this phone for less than it costs to make. They are still making millions of of the cell service, just losing a bit on the hardware.
What iSuppli _cannot_ account for are contractual discounts from vendors. To take their ballpark-estimation as gospel is simply foolish.
VZW to buy from a master dealer the storm costs 500 master dealer claims to only charge 5 dollers over what they paid there for verizon sells the phone to stores for 495. Same situation for the bold on att except masterdealer sells for 520 so that means att sells the bold to its stores for 515