Google Nexus One Costs $174.15 to Make

Google’s Nexus One smartphone, manufactured by HTC, costs approximately $174.15 to make, according to iSuppli. The research firm also noted that the Nexus One has a noise-cancellation processor it’s never seen before, as well as a unibody design shared only by the iPhone.

The Nexus One, sold by Google but manufactured by HTC, costs approximately $174.15 to make, according to a teardown performed by iSuppli. That estimated bill of materials (BOM) tally is a conservative one, the firm said in a Jan. 8 report, as it accounts for hardware and component costs but not expenses such as “manufacturing, software, box contents, accessories and royalties.”

Google sells the Nexus One unlocked for $529, or with a two-year service contract with T-Mobile for $179.

“With the Nexus One, Google has taken the most advanced features seen in recent smartphone designs and wrapped them up into a single sleek design,” wrote Kevin Keller, an analyst with iSuppli, in the report.

“Items like the durable unibody construction, the blazingly fast Snapdragon baseband processor and the bright and sharp Active-Matrix Organic Light Emitting Diode (AM-OLED) display all have been seen in previous phones, but never before combined into a single design,” Keller continued. “This gives the Nexus One the most advanced features of any smartphone ever dissected by iSuppli’s Teardown Analysis Service—a remarkable feat given the product’s BOM is similar to comparable products introduced during the past year.”

iSuppli has estimated a BOM of $172.46 for the Apple iPhone 3G S and a BOM of $170.02 for the Palm Pre.

The most expensive item on the Nexus One’s bill is its 1GHz Qualcomm Snapdragon processor, which iSuppli estimates at $30.50. Qualcomm also supplies the phone’s power management technology and radio-frequency transceiver, each estimated at a more modest $2.50 a pop. Combined, this gives Qualcomm 20.4 percent of the Google phone’s BOM, making it the manufacturer to reap the highest dollar revenue from the device.

According to iSuppli, it’s money well-spent.

“The Snapdragon was first noted in a previous smartphone torn down by iSuppli—the [Toshiba] TGO1 — which is based on [Microsoft’s] Windows Mobile operating system,” wrote Keller. “However, the Android 2.1 operating system used in the Nexus One better capitalizes on the Snapdragon’s fast performance, making the user interface and applications run very quickly. This processing muscle also gives the Nexus One some advanced capabilities, most notably high-definition 720p video playback.”

The second most expensive bit on the Nexus One is perhaps its most immediately noticeable feature, the 3.7-inch Samsung AMOLED display, which costs $23.50. The Samsung Moment and Behold II also feature AMOLED displays, which are said to offer crisper colors, wider viewing angles and, as iSuppli’s Keller added, a “stunning picture.” The capacitive multitouch screen, from Synaptics, is a separate $17.50.

The Nexus One’s considerable memory—4G bits (512M bytes) of Samsung double-data rate DRAM—is the third-ranking item on the BOM, at $20.40.

Also notable, said iSuppli, is the Nexus One’s audio voice processor chip, from Audience Semiconductor, which helps to reduce background noise to the phone’s dual microphones; it’s the first part from this manufacturer that iSuppli has seen.

Additionally, Nexus One’s unibody design makes the device sturdier than one with an enclosure comprising several pieces, but is more costly to manufacture.

“Besides [Apple’s] iPhone, this marks the first unibody smartphone design that iSuppli’s teardown analyst team has noted,” according to the report.

The iSuppli report added, “With the Nexus One, HTC has taken a major cue from Apple in the enclosure design, making it the most ‘Apple-like’ product yet seen from any in the competition, and others are likely to follow suit.”

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