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Wednesday, September 15, 2010

What Smartphones Really Cost

BUYING GUIDE.

Smartphones may be pretty uniform in price at the store, but what they cost to manufacture -- and their price without a two-year contract -- varies wildly.

Apple iPhone 4 (16 GB)

Component Cost: $187.51
Price Without Contract: $599
Price With Contract: $199
Lowest Available Price: $197 (Wal-Mart)

Unlike other smartphone manufacturers, Apple (NasdaqGS: AAPL - News) generally doesn't allow its devices to be sold for any less than in its stores, so $199 is almost certainly what you're going to pay for a new iPhone 4 with a two-year contract. Buying it at Wal-Mart will knock that down a buck or two.

With component costs of nearly $190, the iPhone 4 is the most expensive smartphone on the market to manufacture, according to research firm iSuppli. The largest single component of that cost is the iPhone's Retina Display, which costs an estimated $30 to make.

But the real wallet wallop comes if you break or lose your iPhone 4 and have to replace it before your contract is up. Buying one without AT&T's (NYSE: T - News) subsidy will set you back a jaw-dropping $600.

Samsung Galaxy S - Vibrant

Component Cost: $165
Price Without Contract: $399.99
Price With Contract: $199.99
Lowest Available Price: $39.99 (Amazon.com, Wirefly)

Samsung (KSE: 005930.KS - News) followed in Research In Motion's (NasdaqGS: RIMM - News) successful footsteps by launching what is more or less the same phone on each of the four major U.S. wireless networks.

The phone is Samsung's Galaxy S class, and The Vibrant is T-Mobile's version. AT&T's Samsung Captivate can be had for about the same price with a new two-year contract, but without a new contract, it will set you back $100 more than the Vibrant. Sprint's Epic (NYSE: S - News), the 4G version of the phone, can't be bought for less than $200, however. Verizon's Fascinate (NYSE: VZ - News) version hasn't yet gone to market.

With similar capabilities to other top-of-the-line Android peers, the Vibrant is bargain at $40 with a new contract. Without one, prepare to shell out $400.

BlackBerry Torch

Component Cost: $171.05
Price Without Contract: $499.99
Price With Contract: $199.99
Lowest Available Price: $99.99 (Amazon.com, Wirefly)

The $200 price point surprised a number of people, given that Research In Motion's top-of-the-line BlackBerry doesn't match up all that well with the features and app availability of its high-end smartphone rivals, especially the iPhone or Android alternatives.

But at $100 from retailers like Amazon.com (NasdaqGS: AMZN - News) and Wirefly, the Torch can be a pretty good deal. It's not quite as fast and doesn't have the screen resolution of some of its peers, but the BlackBerry QWERTY keyboard is a big plus for heavy e-mailers and texters.

The touch screen makes the Torch more expensive than most BlackBerry phones, but surprisingly it's not the priciest: Verizon's BlackBerry Storm sells for $540 without a contract, and the Bold goes for $510 on Verizon.

HTC Droid Incredible

Component Cost: $163.35
Price Without Contract: $529.99
Price With Contract: $199.99
Lowest Available Price: $69.99 (Wirefly)

One of the most sought-after smartphones on the market, Verizon's Droid Incredible only recently became available for next-day shipping -- four months after it went on sale.

So with such "incredible" demand and high-end features like an 8 megapixel camera and Android 2.2, it's a surprise that it can be had for as little as $70 on Wirefly with a new two-year contract.

At $40 less than the Droid X and $10 less than the Droid 2 without a new contract, it's also the least expensive Droid-branded smartphone that Verizon offers. It doesn't have a keyboard like the Droid 2 or a 4.3-inch screen like the Droid X, but if you don't need those features, the Droid Incredible is competitively priced.


For more information
For more on retail outlets, check out our where to buy Bestsellers in Phones article.

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