Google G1 phone cheaper to build than Apple’s iPhone

HTC is able to build the G1 phone for a much lower bill of materials (BOM) than what Apple has to shell out for the iPhone 3G,. According to iSuppli, the hardware cost difference between the two devices is about 17%. Apple’s most significant expense is the flash memory and the screen, while HTC drops the most money into the baseband unit.

The market research firm estimates that the combined hardware cost of the G1 is $143.89, which compares to about $173 that Apple pays for the hardware of an iPhone 3G with 8 GB of flash memory ($164 without manufacturing). Holding a G1 and an iPhone in your hands side-by-side will reveal some of that cost difference, but the true differences that impact cost are actually under the hood. 

Apple is estimated to pay about $23 for the 8 GB memory chip, which is the most expensive single component in the iPhone 3G. HTC, however, spends an estimated $28.49 on the device’s baseband chip, which uses a combination of an ARM11 microprocessor for multimedia applications and an ARM7 core for modem functions. Both companies spend about $20 on the touchscreen, while HTC spends more on the camera module ($13 vs. $7)  

iSuppli identified the Radio Frequency (RF)/Power Amplifier (PA) portion, which costs $9.84 in the G1, as a key differentiator between the two phones.  The G1 supports the HSDPA air interface at the 1700/2100 bands for 3G, which limits its U.S. end users to T-Mobile subscribers. If used in combination with AT&T, a user can only hit EDGE download speeds. In contrast, the iPhone 3G supports the HSDPA air standard operating at the 850/1900/2100 bands. 

In many areas, the iPhone 3G seems to be much more technologically advanced than the G1. For example, the G1 has a projective touchscreen and a full QWERTY keyboard, while the iPhone relies on a sophisticated capacitive touchscreen with multi-touch capability – a feature the G1 lacks. There are also interface and software difference: For example, the G1 supports the downloading of music just like the iPhone, but unlike the iPhone, G1 users are limited to Wi-Fi to take advantage of this feature.

 

Also, the G1 presently supports only Post Office Protocol version 3 (POP3) mail, which does not work with many corporate e-mail systems, iSuppli said.