Motorola’s Milestone and Google’s Nexus One are both Android 2.0 smartphones, but a Bill of Materials (BoM) breakdown has revealed that the Googlephone costs less to make. Motorola Milestone Motorola's Milestone: more expensive parts than the Nexus One The Milestone – reviewed here and called Droid in North America – has a …
Motorola Milestone has more pricier parts than Nexus One
However, if you compare the costs here in the UK, the Milestone is about £400 while the Nexus comes out at around £343 including shipping costs and VAT. Pretty interesting !
So why do these devices cost so much?
I'm surprised by the bill of materials. Neither device is especially expensive so why the heck are they so ludicrously expensive to buy? The Motorola Milestone is 4-5x the price of the parts.
I can understand cash strapped Motorola jacking up the price, but surely Google want to stick their device into as many people's hands as possible? It's not like they'd be selling themselves short either since they could still lower the price, and still make a healthy profit.
Hardware cost isn't the only expense...
The production and overhead costs are probably at least 2x the cost of hardware. And then the companies are expected to make a profit as well...
A couple of corrections
The Nexus One does not have the same screen as the Motorola Milestone -- the Milestone has an 854x480 pixel trans-reflective LCD screen, whereas the Nexus One has an 800x480 pixel active-matrix organic LED screen. It's not really surprising that this newer technology is more expensive.
Secondly, in response to Michael's comment, the Nexus One (if you remove the unnecessary mains charger) is $558.65 shipped to the UK, which is (at the current exchange rate) £341.85 before VAT, (possible) import duty and handling fee.
Unless you are lucky enough to be overlooked by customs, the expected total price for a Nexus One today is £341.85 + £59.82 VAT + DHL handling fee, bringing the total price to approximately £400. It is also unclear currently as to whether the Nexus One attracts duty or not (mobile phones do not, but devices with GPS do, at 6%). This could increase the final price to approximately £425.
As time goes on, better components cost less.
The superior hardware of the Droid/Milestone cost less than those of the iThing 3GS.
And the Nexus One, which is better than the Droid, costs less than the Droid's parts.
Expect next year's superphone to cost less to build than this year's.