1. RyanGermann's Avatar
    Inspired by this post from another thread:

    This is going to be a very expensive device to manufacture. Big battery, great camera, physical keyboard with touch sensitivity, sliding mechanism, dual flash, curved screen, etc.
    I'm curious to know where these assumptions come from. How much do people think it costs to manufacture "non slider" or "simple" full-slab devices, vs. a slider.

    From this page:

    iPhone 6 Component Costs Estimated to Begin at $200, Samsung Supplying Some A8 Chips - Mac Rumors

    According to IHS iSuppli's teardowns, parts and labor costs for the iPhone 6 are estimated to begin at $200 for the 16 GB iPhone 6 model...
    How much more expensive do you think it will be to manufacture the Slider, given the lower volumes and the slider mechanism?

    Go ahead and take a wild guess, I'm just curious to know how much people actually think the slider mechanism adds to the sunk cost of the device. Go ahead and factor in per-device after-sales support costs if you think they are material to the cost per device. All I know is I just got notified by Apple that my iPhone 6 Plus might have a camera problem requiring the device to be returned for service where they will actually disassemble my device, replace the camera, reassemble it and send it back to me at no cost to me: sure iPhone margins are stratospheric, but that round trip is bound to cost $60-$80 or so inclusive of shipping costs, time spent on the phone with a support rep, infrastructure maintenance and management, etc... any device is subject to issues like that I guess, and it looks like the Slider's camera will have OIS and focus which will introduce the same kind of problem with the iPhone 6 camera... so... maybe that's an argument against "high quality" cameras!

    I'd like to know what people think about how much more the "slider" costs to manufacture and support than other flagship devices.

    I think $50, tops. That's $100 on the retail cost of the device. I'll pay it gladly.

    Based on your own ideas of how much more the slider mechanism could add to the device cost, how much would it have to be to totally put you off buying the device? You'd buy it if it only added $50, but if it adds $200 no way? (I'm thinking about the cost premium for the Galaxy 6 Edge over that of the Galaxy 6 and how it wouldn't be worth it to me, but for some, it would. If I could save $100 on the Slider by foregoing the curved screen, that's a savings I'd take).
    09-04-15 01:50 PM
  2. howarmat's Avatar
    I would think slightly more R&D costs and such but parts are probably around the same as other phones with similar specs. As for cost to consumer I would guess it will be inline with the Sammy G6 edge so probably slightly premium pricing. BUT if BB was smart they offer it for less.
    09-04-15 01:58 PM
  3. non-vtec's Avatar
    09-04-15 02:03 PM
  4. mad_mdx's Avatar
    You can't compare it to an iphone 6 which has less ram, a low resolution screen, and basically no new technology beyond the cpu
    Even the z10 may have cost more to make...
    09-04-15 02:19 PM
  5. BCITMike's Avatar
    In school, the instructor with 30 years in telecom said $0.10 in added resistors adds $2 to cost of product. We all thought he was being silly.

    After years of thinking little tweaks would be sub $1 that turned out to be $6+, I see what he means.

    Posted via CB10
    09-04-15 02:26 PM
  6. chenageddon's Avatar
    The first unit manufactured costs tens of millions if not hundreds, and the rest cost about as much as iFixit says they do.

    The cost per unit is going to mostly depend on volume. Let's say you spent 100 million designing the hardware. If you sell 10 million units then your design costs were $10 per unit. If you sell 100 million units like Apple does, then your design cost is $1 per unit. Every fixed cost including marketing works like that.

    Your component costs probably can't be more than 50% higher for premium devices. Also, your service event may have cost Apple $50-$75 but if you upgraded from 16MB to 64MB they made more than that in profit on the RAM.

    There's not much sense in trying to figure out what the price will be nor what the value proposition is based on the components. That's not going to capture the perceived value to the user.
    09-04-15 02:39 PM
  7. lnichols's Avatar
    My guess would be about $50 to $100 more per unit due to lower volumes and more complicated manufacturing processes needed to assemble the device. Stupidly they could probably take a Z30 chassis, put in a 1080 or 1440 screen and the same SOC and cameras as the slider and make more per device.

    Posted via Z30
    09-04-15 02:46 PM
  8. ryu physique's Avatar
    I heard from who works at samsung electronics and he manages importing parts. He told me that samsung flagship device parts and second device of cost has big gap. Also flagship device PARTS ONLY cost around $220-250. That does not include marketing fees, labors, just materials cost.

    Posted via CB10
    09-04-15 07:37 PM
  9. AnimalPak200's Avatar
    This is going to be a pretty tight device in terms of being able to make much money off of it,.. unless they can keep the line running for a long time.

    Not only is there significant design R&D into aspects such as the basic mechanism, how to assemble it in a production line (including how to maintain connector integrity over tens of thousands of 'slides'); but there's also been significant R&D on the OS and application side.

    Add the fact that it is a high risk (uncommon form factor, first entry into ecosystem),.. I doubt they would commit to large volumes.

    Along the same lines,.. a consumer will likely see it as a risky purchase and will not be as open to a very high price tag.

    I don't know... but I wouldn't want to be the poor sap crunching the numbers right now.

    Posted via CB10
    09-04-15 07:49 PM
  10. Mayor McCheese's Avatar
    I think some of you are failing to recognize the entire "life cycle" of costs associated with the smartphone business.

    Manufacturing costs are only one small segment of the costs associated with a smartphone business, especially those that only look at the costs of raw materials involved.

    R&D builds **** loads of costs, support departments such as HR, marketing and operations all need to be allocated in an "overhead" account of expenses that phone sales need to cover. Don't forget management labor costs, legal department support, and the software development labor costs that are allocated to device costs aswell, etc and things become very expensive Ala phone sale margins.

    Think broad people!

    Posted via CB10
    09-04-15 09:09 PM
  11. RyanGermann's Avatar
    Many of the posts are interesting... but to those attempting to skool us noobs on the fact that a smartphone manufacturer ALSO has to pay salaries for marketing staff and stuff, thanks, but the SUBJECT LINE of the topic makes DIRECT reference to the cost of the slider being relative to other devices... not just a device in and of itself. I think it's fair to say whether or not the device is a slider, the SoC and motherboard and memory and screen etc. all have to be "researched" and "developed" and "marketed" whether or not it's a slider device or a full touch, whether it's running BB10 or Android, etc., etc.,

    So, assuming that aspects of "designing, developing and manufacturing a device" all pretty much "exist" no matter what the device form factor is... how much MORE do you think a Slider costs than a similarly-speced full slab that isn't a slider.

    I'm imaging how much marketing effort has to go into an ad that has a picture of the full slab device with no buttons on it but it has a logo... LG or HTC or Motorola or whatever... and how hard it is to stand out... but if there's an ad for the Passport or the Venice, well, they leap off the page at the reader, either you want a PKB or you don't but the challenge of marketing a full slab Android device in the rough seas of "undifferentiated Android full touch devices" may in fact cost a lot MORE to make an impact than a Slider or other unique device. What do you all think of that? I mean, assuming that the ad isn't trying to sell a PKB device on the MERITS of it having a PKB: I mean someone seeing the ad will either be completely turned off and pay no attention (hate PKBs) or be slightly intrigued, very intrugued, etc., and then the point would be for the ad "If we haven't already lost you with the PKB, then get a load of THIS...!"

    Think of iPhone ads: especially for the "s" series: the 6S device will look pretty much the same as the 6... so what Apple has to say is of course why the 6S is better than the 6. Or they don't even try, it's just the current flagship iPhone, and they continue to market it as an iPhone which is all the things an iPhone is. They just have to put ads on the side of every building and bus shelter and wallpaper every carrier store, like they already do. Oh, and have that little show on the 9th where every media outlet will give them hours of free advertising.

    So I assert that marketing a Slider is in fact less costly and less effort than trying to market a full slab against competitors. Discuss :-)
    09-05-15 08:37 PM
  12. CTU2fan's Avatar
    How hard is it to research original MSRP on past devices? That might give us some kind of basis anyway. Say the difference in price on the 9810 vs 9860, or on my old Motorola Photon Q (slider) vs the regular Photon (full touch). Or S6 vs S6 Edge if you're curious about curved screens.

    Posted via CB10
    09-05-15 09:11 PM
  13. Mayor McCheese's Avatar
    How hard is it to research original MSRP on past devices? That might give us some kind of basis anyway. Say the difference in price on the 9810 vs 9860, or on my old Motorola Photon Q (slider) vs the regular Photon (full touch). Or S6 vs S6 Edge if you're curious about curved screens.

    Posted via CB10
    I doubt past prices would be that relevant in this analysis due to companies commonly basing their pricing schemes off of 3 main factors (its not as simple at looking at past prices).

    - a company must consider and cover it's COSTS to a reasonable margin... and:

    - a company must consider the pricing of its COMPETITORS when deciding what to charge for a product, and:

    - a company must consider the characteristics of its targeted CUSTOMERS (such as economics, willingness to pay, perceptions, age, etc)


    These are dynamic factors that obviously change over time. Back when smartphones were young and BlackBerry was in its heyday, industry margins were high, but with time, increased competition and market saturation, margin erosion has occurred to the point where android phone makers are rumored to be profiting per device on a penny scale.
    Posted via CB10
    09-06-15 01:28 AM
  14. deadcowboy's Avatar
    In school, the instructor with 30 years in telecom said $0.10 in added resistors adds $2 to cost of product. We all thought he was being silly.

    After years of thinking little tweaks would be sub $1 that turned out to be $6+, I see what he means.

    Posted via CB10
    Can you explain what you mean by this? Why is this the case? And at what point in the inception and production does this become a reality?

    Posted via CB10
    09-06-15 04:35 AM
  15. BCITMike's Avatar
    Can you explain what you mean by this? Why is this the case? And at what point in the inception and production does this become a reality?

    Posted via CB10
    Roughly speaking, when its getting past the eng state and into final product. Or in this case, having a finished product and having to go back in and tweak the design for a small change. When you add up the time for the CAD work, the cost of new PCB screens, new samples from PCB mfg'er, design revisions, lab testing/certification, time delays, new molds, lots of little things that vary, etc.
    09-09-15 03:20 AM
  16. chenageddon's Avatar
    Any estimate of slider hardware cost is going to have to figure in additional warranty returns. I'll bet a slider has 3 times the frequency of warranty returns due to the sliding mechanism. Why? According to Jim Balsillie, the physically clicking BlackBerry Storm had a 100% return rate (BlackBerry co-founder Balsillie says that the BlackBerry Storm had a 100% return rate). Just look at webOSNation threads about the Palm Pre slider mechanism and how many times those users returned their phones for replacement.

    There is also extra cost to adding additional hardware configurations for different keyboard layouts compared to much easier software changes for market-specific keyboards such as "AZERTY" layouts. I wonder how many different hardware keyboard variations you need to release worldwide these days.
    09-09-15 09:39 AM
  17. AnimalPak200's Avatar
    Any estimate of slider hardware cost is going to have to figure in additional warranty returns. I'll bet a slider has 3 times the frequency of warranty returns due to the sliding mechanism. Why? According to Jim Balsillie, the physically clicking BlackBerry Storm had a 100% return rate (BlackBerry co-founder Balsillie says that the BlackBerry Storm had a 100% return rate). Just look at webOSNation threads about the Palm Pre slider mechanism and how many times those users returned their phones for replacement.

    There is also extra cost to adding additional hardware configurations for different keyboard layouts compared to much easier software changes for market-specific keyboards such as "AZERTY" layouts. I wonder how many different hardware keyboard variations you need to release worldwide these days.
    I returned my Storm, but because of a faulty usb charging port.

    As for the surepress screen issues (too hard to press, uneven resistance, etc), I followed some CB tips and taped a dime to the back of the battery... too bad they couldn't include that fix as part of their official knowledge base articles.

    Posted via CB10
    09-09-15 09:50 AM
  18. Xadion's Avatar
    A slide mech in no way costs 50$ in production to make... it also does not cost a few millions in development... slide has been done before- they have done it before- refinement etc.

    The per unit cost is WAY less than people think. There are so many hands that get fed each at a desirable margin. A 600$ device costs at most 100-150 off the belt line... but that in no way means BlackBerry makes 450-500 per device either. MSRP is based off of a calculation that it is sold at a retail shop by a sales person who is paid in commission- so all the way to the end there is markup.


    Posted via CB10
    09-10-15 05:48 PM
  19. BCITMike's Avatar
    A slide mech in no way costs 50$ in production to make... it also does not cost a few millions in development... slide has been done before- they have done it before- refinement etc.

    The per unit cost is WAY less than people think. There are so many hands that get fed each at a desirable margin. A 600$ device costs at most 100-150 off the belt line... but that in no way means BlackBerry makes 450-500 per device either. MSRP is based off of a calculation that it is sold at a retail shop by a sales person who is paid in commission- so all the way to the end there is markup.


    Posted via CB10
    No, no it doesn't. Think 40% margins. $200-$300 BOM cost. It would have been helpful for you to provide example or why you have experience in this field.

    From Google:
    How much profit does Apple make per iphone?
    The cost of the new iPhone 5 sets Apple back between $207 and $238, according to IHS, depending on whether the model is the 16 GB, the 32 GB, or the 64 GB version. At $649 for the 16 GB model, Apple is generating $442 per phone in profits, excluding outside expenses.
    Apple iPhone 6 / 6 Plus Teardown
    Preliminary analysis of the iPhone 6 Plus estimates it costs $242.50 USD to build
    Samsung Galaxy S5 Carries Astronomical Bill of Materials, IHS Teardown Reveals | IHS Online Newsroom
    The Samsung Galaxy S5 with 32 Gigabytes of NAND flash memory carries a BOM of $251.52, according to a preliminary estimate by the Teardown Mobile Handsets Intelligence Service at IHS Technology (NYSE: IHS).The cost rises to $256.52 when the $5.00 manufacturing cost is added.
    This is more expensive than other high-end smartphones, such as the 32GByte iPhone 5S, which carried a $207.00 BOM based on an IHS pricing estimate in September. The S5’s BOM contrasts even more starkly with smartphones at the lowest end of the cost spectrum, such as two Android devices, the ZTE U793 and K-Touch T619+, which have BOMs of less than $35, according to recent IHS teardowns.
    “The high cost of the S5 is becoming more typical of Samsung’s flagship Galaxy line,” said Andrew Rassweiler, senior director, cost benchmarking services for IHS. “In the last year, IHS has torn down four Galaxy devices with BOMs ranging from $237.00 to $280.00.
    09-10-15 07:49 PM

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