Palm Pre Costs $170 to Make, Expects to Retail for $200

By Allen Tsai | Tue May 05, 2009 7:23 pm

Palm's highly-anticipated Pre smartphone costs $170 to make and is expected to be priced around $200 after a carrier subsidy from Sprint, according to market researchers at iSuppli.

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Palm Pre

According to second-quarter component cost and assembly pricing, the Pre's $170.02 estimate consists of a hardware cost of $137.83, manufacturing and basic test costs of $9.58, and software and licensing costs of $22.61.

ISuppli anticipates Palm will sell the Pre to Sprint for about $300, but said the actual cost to customers will be around $200 due to an expected carrier subsidy.

The Pre is seen as Palm's best hope to fight heavyweights Apple and BlackBerry maker Research In Motion, which have hurt Palm's smartphone sales in recent years.

"The similarity in features between the Pre and the iPhone clearly reveals the mark Palm is trying to hit," said Tina Teng, an analyst at iSuppli. "The use of a multi-touch screen -- a key allure of the iPhone -- and Palm's innovative WebOS operating system, are likely to allow the Pre to appeal to a broad range of consumers."

The Sunnyvale, Calif.-based company has also been inviting developers to create applications for its upcoming online software store -- similar to Apple's popular App Store.

Palm has yet to announce a release date for the Pre, but rumors have circulated that it will hit store shelves in early June, around the same time Apple's new iPhone is rumored to launch.

Posted In: Palm (64) | Reports (622) | WebOS (56)

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