A new report is showing that Google is making a nice and tidy sum off of the Nexus One, versus what Apple gets for the iPhone, according to BNET.
iSuppli did a recent teardown of the Nexus One from Google and estimated it at just over $174. Late last June, the company did a similar teardown of the iPhone 3GS, and estimated it with a combination of bill of materials and manufacturing cost at $178.96.
Since Apple's prices for the iPhones range anywhere from $99 to $299, this would suggest that unless the cost of building an iPhone 3G has plummeted by about half in the last seven months. This being highly unlikely, it would translate into Apple selling it at a loss with profit being buoyed by the portion of service revenue that is obtained from carriers.
With Google selling Nexus One for about $530 directly to consumers, this would result in a gross margin of approximately $356. Of course the service portion doesn't allow for a direct comparison, but certainly adds humor to a recent statement by Google engineering VP Andy Rubin: "There is an opportunity to make some margin on the unit sales, but that's not the objective here. Our primary business is advertising."
Knowing that, this all comes at a time too when Google is having its customer service get tested with recent issues with the Nexus One.
mbriney
January 11, 2010 at 8:56am
Your article is factually skewed you are not taking into account the AT&T subsidies. If I were to go into an AT&T store right now and purchase a phone with no subsidies the cheapest option available would be $299 for an 8GB iPhone 3G. The highest price is $499 for the 32GB 3GS. Those are the current retail costs of the phone.
