Let's break this phone down here..

[Diordna]

Just an interesting thread for those who are curious about what every part of the Droid costs.
iSuppli said it was better than Nexus One and iPhone 3GS in their class. Take away the Droids $35 SD card it'll be lower than both other phones, and it's quite important.
Anyways, here's a break down list.

 

[tktouch12]

wow, that seems like a lot to me. thats with the bulk prices they get? wow
by "better" what do you mean? more expensive?
so when we get the phone for 200 they dont really make anything (except the 2 years of a $30 a month data plan..)

 

[roflcopters]

So WHY on earth does it retail for $550?

 

[tktouch12]

So WHY on earth does it retail for $550?

so motorola can make money... in order to develope a droid 2... still, good question

 

[rda990]

So WHY on earth does it retail for $550?

Agree.....

 

[dezymond]

So WHY on earth does it retail for $550?

to make hella money and that list doesn't include labor.

you'd be surprised at how "cheap" things are made compared to how much they retail for.

 

[Diordna]

I mean better by over all pricing compared to the other 2 which don't have built in SD cards. The next iPhone is most likely going to have one though.

 

[soops]

raw cost

That cost breakdown may very well be the raw manufacturing cost, but typically should include packaging, shipping, etc. Also, I'm guessing the higher cost these co. charge for "unlocked" phone could be the full cost which include R&D, supports and other misc. fixed costs.

My .02 cents.

 

[Diordna]

So WHY on earth does it retail for $550?

to make hella money and that list doesn't include labor.

you'd be surprised at how "cheap" things are made compared to how much they retail for.

Good example is pizza. It is very VERY cheap for companies like Dominoes to make a pizza, making a hell of a lot of profit from consumers.

 

[Bob Dammit]

So WHY on earth does it retail for $550?

Agree.....

They knew we would all spend that much.

 

[Martin030908]

Companies are out first and foremost to make money. Look at a sneaker.... they retail for $100+ but cost less than $10 to make. It's all about margin.

 

[thelion]

Folks asking why the phone has the markup it does seem to be missing a few key things:

1. the list includes no overhead or labor
2. It doesn't include the shipping costs to get the phone to stores
3. It doesn't include the store markup (VZW profit margin)
4. It does include Motorola's markup.

Once you add in all of that you get the retail cost. Plus, they knew it would be high demand so people would spend more so they could have a higher markup. Such is business.

 

[Magdroid]

Don't forget that it also doesn't add the software, software labor (research and upgrades / updates to the software), troubleshooting, etc..etc..etc.

 

[pc747]

As said, labor, insurance, and needing to make a profit. Its economics. When You release a new item you want to make as much profit as you can why the demand is high. Once the demand drops its a matter of getting rid of inventory before you take a loss on widgets (phones). Its all good, its not like we PAID 500 we paid 300 up front, we make up for the extra 200 in our first 2 months of service.

 

[Diordna]

Agreed. This list is only telling you how much specific major parts of the Droid costs for curious interesting reasons, not including the research, software, time ect and most importantly.... they're a rich business!