Smartphone Production Costs Dropped in 2010

15 Mar 2011

The price of smartphone materials fell by 13 per cent last year compared to 2009, according to In-Stat, as the production of cheaper handsets increased to meet comsumer demand.

The biggest costs in a smartphone are its display screen and processor and the price of both dropped sharply in 2010, In-Stat said in a statement. Other high material costs are for the device's memory, camera, software and case.

In-Stat analyst Allen Nogee said component prices were also affected by the integration of GPS, Bluetooth, Wi-Fi and sometimes FM radio onto a single chip. All were previously on separate chips, he said.

Also, increased use of free or low cost open-source software played a role in lowering the cost of smartphone software and licensing.

In-Stat projects that half of US mobile phones shipped in 2012 will be smartphones - in 2010, less than 30 percent of US wireless subscribers used a smartphone, according to Nielsen research.

In-Stat didn't reveal the costs for smartphones in the announcement about its report on smartphones, which is available for $3,495.

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